Oman hotel market: Sustainable growth?

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Between 2013 and 2017 the number of hotels in Oman increased by 35%, according to the National Centre for Statistics and Information (NCSI).

With Oman experiencing sustained growth in tourism arrivals, recent years have seen the concurrent expansion of lodging options.

Alternative accommodation – such as vacation rental apartments and short-term holiday lets – is also becoming more visible in the market. Occupancy rates are on the lower side for the time being, hovering at an average of between 50% and 60%, as a pipeline of new hotels continues to give visitors more alternatives and keeps competition high. Still, many in the sector are optimistic and predict that those who can stay in the game will reap impressive benefits in the medium to long term.

Muscat, Oman’s capital, has long been the main entry point to the country and home to the most accommodation options. According to data from the NCSI, of the 359 hotels in Oman in 2017, 142 were located in the Muscat Governorate. Of those hotels, nine were classified as five-star, 12 were four-star, 16 had three stars and 21 were rated two-star, with the remainder being classified as “other” – combining one-star establishments, unclassified hotels and alternative accommodation. Colliers International reports that Muscat had some 10,924 keys at the end of 2017, an increase of about 11% year-on-year (y-o-y).

When looking at the NCSI breakdown of the number of hotels in the sultanate in 2017, 5% were classified as five-star and 7% were four-star, and 68% fell into the “other” category. Outside the capital, governorates offering five-star hotels are Al Batinah North with two, Musandam and Ad Dakhiliyah with one each, and Dhofar with four. In terms of growth per category, the number of five-star hotels in the country as a whole rose from 12 to 17 in the years between 2013 and 2017, while four-star establishments grew from 22 to 24. Conversely, the amount of three-star and two-star options both shrank, from 28 to 26 and from 52 to 49, respectively, indicating a shift away from the mid-range. One-star and uncategorized accommodation, meanwhile, ballooned from 152 to 243. According to the Ministry of Tourism (MoT), the number of rooms throughout the sultanate grew by 9.3% in 2017 to reach 20,581, while the amount of beds rose from 29,538 to 31,774.

Click to read the full article on Oxford Business Group

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