Oman hotels lift revenues despite weaker tourism

MUSCAT: Hotels in the Sultanate of Oman increased revenues during the first quarter of 2026 despite a slowdown in visitor numbers, as stronger room rates helped offset weaker travel demand caused by seasonal factors and regional disruptions, according to a report by real estate consultancy Cavendish Maxwell.
Revenue generated by the Sultanate of Oman's three- to five-star hotels rose 8.4 per cent year-on-year to RO 85.4 million during the January-March period, even as guest numbers fell 5.9 per cent to about 572,000 and average occupancy slipped to 56.1 per cent from 59.3 per cent a year earlier.
The report said hotels were able to maintain pricing power during the first two months of the year, with average room rates climbing 15.5 per cent to RO 57.5, while room revenue increased 13 per cent to RO 53.2 million.
'Oman's hospitality market faced some demand pressure in the first quarter, partly linked to shifting seasonal travel patterns and regional disruptions,' said Khalil al Zadjali, Head of Oman at Cavendish Maxwell.
'Even so, hotels continued to record revenue growth supported by stronger room rates. Looking ahead, the combination of measured supply growth and continued tourism initiatives should help support the sector's long-term development,' he said.
The consultancy attributed the softer performance largely to the earlier timing of Ramadan, which shifted travel patterns, together with regional airspace disruptions that affected travel activity during the latter part of the quarter. Passenger traffic through Oman's airports fell 2.4 per cent year-on-year to 3.46 million, with international travel declining 3.2 per cent while domestic passenger numbers increased 3.5 per cent.
Muscat International Airport handled 3.12 million passengers, accounting for more than 90 per cent of total airport traffic, while Salalah Airport served around 329,000 passengers during the quarter.
European travellers remained the largest source market for three- to five-star hotels, representing 36 per cent of total guests despite an 11.4 per cent decline in arrivals. Omani nationals accounted for 30.9 per cent of guests, with domestic demand rising 3.1 per cent, while visitors from Asia recorded modest growth.
The report said Oman added 432 hotel keys during the first quarter and expects a further 1,200 keys to be delivered before the end of 2026, bringing total hotel inventory to about 41,400 rooms. The phased supply pipeline is expected to limit pressure on the market, although absorption will depend on the recovery in tourism demand.
Cavendish Maxwell said government initiatives to improve tourism infrastructure, strengthen international connectivity and expand partnerships with airlines and travel operators should support long-term demand. However, near-term market performance will continue to depend on regional travel conditions, visitor confidence and the pace of tourism recovery.