Oman to deliver 700 new hotel rooms by year end

BUSINESS REPORTER

MUSCAT, SEPT 27

The Sultanate of Oman is set to deliver 700 new hotel rooms between now and the end of 2026, taking total inventory to 40,800 keys, according to leading real estate advisory and hospitality property consultancy Cavendish Maxwell.

Oman opened 400 new rooms in H1 2026 – all in Q1 – amid reduced hospitality sector activity as regional travel disruptions affected international connectivity and tourism trade.

The Khareef and winter travel seasons will be key drivers in the country’s H2 hospitality performance, the company said.

Oman welcomed 992,000 guests at 3-5 star hotels in H1, down 13 per cent on the same period last year. Airport passenger traffic declined 9.3 per cent to 6.3 million, according to Cavendish Maxwell’s latest research, released in the run up to the 2026 edition of Future Hospitality Summit World.

Khalil al Zadjali, Head of Oman at Cavendish Maxwell, said: “Oman’s hospitality sector entered H2 in a challenging environment. While the outlook remains sensitive to prevailing travel conditions, the July to December period typically accounts for a significant share of tourism activity, contributing 52 per cent in hotel revenue and guest volumes last year.

“The recent Khareef season – Salalah’s peak tourism period – coupled with the upcoming winter months will indicate how effectively seasonal demand supports the wider market following the H1 disruption, which was most pronounced in the second quarter. Government and tourism sector initiatives – such as international promotions and partnerships with airlines and travel trade partners – should also help strengthen demand.”

REVENUES AND ROOM RATES

Oman’s 3-5 star hotels generated RO 124.2 million (US$322.7 million) in total revenue in H1, down around 12 per cent against H1 2025. Revenue growth was strong at the beginning of the year, increasing nearly 27 per cent year-on-year in January and almost 9 per cent in February, before declining from March. Following the sharpest contraction in April, when revenues fell 64.5 per cent compared to the previous April, the pace of decline moderated in May and June, at around 28 per cent and 15.5 per cent respectively.

Room revenue was down 11 per cent to RO74 million (US$192 million), with other revenue declining by 13 per cent to RO 50.2 million. The decline in ‘other’ revenue is partly because domestic and regional travellers typically spend less per stay than long-haul visitors, Cavendish Maxwell said.

Average room rates (ARR) followed a similar pattern, with a robust start to the year before weakening in Q2. ARR was up nearly 19 per cent year-on-year in January at RO 58.3, and more than 20 per cent in February to almost RO 61. March was on a par with March 2025.

The sharpest ARR decline (around 43 per cent) came in April but, by May, it had partially recovered, increasing more than 8 per cent year-on-year to RO 43.7 (US$113.6) as Eid Al Adha boosted travel demand.

Occupancy rates across Oman averaged 46.3 per cent in H1, down more than half compared to the same period last year. Again, performance was impressive in January and February, with occupancy around 70 per cent, before dropping from March. The decline was most acute in Q2 as regional tensions weighed in on international travel and, while domestic visitors provided some support, it was not enough to compensate for the overall decline in visitors.

After a January year-on-year increase of 7.3 per cent in guests, volumes declined monthly, reflecting air disruption across the Gulf. The steepest drop was in April (43 per cent), but performance picked up again in May, when the decline narrowed to 2.6 per cent as conditions normalised and Eid Al Adha supported travel demand.

Omani nationals represented the biggest source market in H1, with 396,000 guests accounting for almost 40 per cent of all visitors – a rise of 3.1 per cent on the same period last year. Europeans (247,000) took second place, at 25 per cent, but their numbers were down 31 per cent compared to last year. With 163,000 visitors, Asians made up 16 per cent, with a marginal year-on-year increase of 0.6 per cent.

Most other source markets saw lower year-on-year guest volumes, with the GCC down 17 per cent, other Arab countries down 15 per cent, the Americas down 22 per cent, Africa 10 per cent and Oceania 61 per cent.

After delivering 400 new rooms in H1 – all between January and March – Oman is set to bring another 700 to the market by December 2026. A further 1,500 are scheduled in 2027 and 1,600 in 2028, taking total Oman room inventory to 43,900 by end of 2028.