Hotel revenues and room rates
Oman’s three- to five-star hotels generated OMR124.2 million (US$322.7 million) in total revenue in H1, down around 12% against H1 2025.
Revenue increased nearly 27% year on year in January and almost 9% in February, before declining from March. The sharpest contraction came in April, when revenues fell 64.5% compared with April 2025. The pace of decline moderated in May and June, to around 28% and 15.5%, respectively.
Room revenue fell 11% to OMR74 million (US$192 million), while other revenue declined 13% to OMR50.2 million (US$130.4 million). Cavendish Maxwell attributed part of the decline in other revenue to domestic and regional travellers typically spending less per stay than long-haul visitors.
Average room rates (ARR) followed a similar pattern, with a strong start to the year before weakening in Q2. ARR increased nearly 19% year on year in January to OMR58.3 (US$151.6), and more than 20% in February to almost OMR61 (US$158.4). March rates were on a par with March 2025.
The sharpest ARR decline, around 43%, came in April. By May, rates had partially recovered, increasing more than 8% year on year to OMR43.7 (US$113.6) as Eid Al Adha boosted travel demand.
Occupancy averaged 46.3% in H1
Occupancy rates across Oman averaged 46.3% in the first half of 2026. January and February recorded occupancy of around 70%, before rates began dropping in March.
The decline was most acute in Q2 as regional tensions weighed on international travel. Domestic visitors provided some support, but this was insufficient to compensate for the overall decline in visitors.
Guest volumes and source markets
Following a 7.3% year-on-year increase in January, guest volumes declined in each subsequent month of H1, reflecting air travel disruption across the Gulf. The steepest fall was in April, at 43%. In May, the decline narrowed to 2.6% as conditions normalised and Eid Al Adha supported travel demand.
Omani nationals represented the largest source market in H1, with 396,000 guests accounting for almost 40% of the total. Their numbers increased 3.1% compared with the same period last year.
Europeans were the second-largest group, with 247,000 guests accounting for 25% of the total, although their numbers fell 31% year on year. Asian guests totalled 163,000, representing 16% of the market and a marginal annual increase of 0.6%. Most other source markets recorded lower guest volumes. Visitors from the GCC fell 17%, other Arab countries 15%, the Americas 22%, Africa 10% and Oceania 61%.
Hospitality employment
Hospitality sector employment among Omani citizens rose 3.4% in H1, while total employment in the industry declined 2.7% year on year. At the end of June, the sector employed just under 10,500 people.
Hotel supply pipeline extends into 2028
Following the delivery of 400 rooms in H1, another 700 are expected to enter the market by December 2026. A further 1,500 rooms are scheduled for 2027 and 1,600 for 2028, taking Oman’s total room inventory to 43,900 by the end of 2028.
Khalil Al Zadjali added: “Total room supply will reach 40,800 by the end of 2026 – less than the 41,400 previously anticipated because some projects have been rescheduled to next year. The upcoming, phased pipeline should help manage near-term supply growth, but the pace of visitor recovery will be key to the absorption of new capacity. With a limited number of keys coming in the near future, supply growth is unlikely to be a major constraint in the short term. However, the larger pipeline from next year and into 2028 will be more dependent on the recovery in visitor demand.”
