HOTELIER MIDDLE EAST | May 2019 | Volume 18 Issue 05MARKET UPDATE
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HOTEL PERFORMANCE
To meet targets for Oman’s tourist sec-
tor, the country’s government has com-
piled a long-term plan for economic di-
versity through the Vision Oman 2020
initiative that aims to grow its GDP from
6.7% in 2010 to 9.2% by 2020 through
tourism related activities.
Plans are in place to increase region-
al tourism numbers to the Sultanate
through a new e-visa system. Set up by
Oman’s MoT, the system is designed to
hit the government’s 11 million mark for
tourist arrivals by 2040.
Latest figures from the National
Centre for Statistics and Information
(NCSI) showed that total revenues
of the Sultanate’s hotels in the three-
to-five-star category rose by 13% to
OMR46.7 million ($121.3m) till the end
of February 2019 compared to OMR41.3
million ($107.3m) for the same period of
the previous year.pancy levels directly impacted RevPAR
which fell by 9%.
Departmental profits are also proving
to be weak, with the rooms and food and
beverage (F&B) departments witness-
ing a 12.2% and 19.2% reduction respec-
tively.
With such a trying year, Tri Consulting
director Christopher Hewett does not
anticipate improvements for the future
of Muscat’s hotel industry.
“Hotel performance in Muscat is ex-
pected to see further pressure on perfor-
mance as the economic forecast remains
muted,” said Hewett. “The main pres-
sure on performance will be driven by
not only lower demand but also the en-
try of new properties which will further
increase the supply and demand imbal-
ance.”
In terms of the whole Omani market,
Oman’s Tourism Development Co (OM-
RAN), Zoltan Kali, added that 2018 lev-
els grew for the region, driven by occu-
pancy with a slight softening of the rates.
“Oman has been relatively undersup-
plied with a wide range of hotel offerings
for a couple of decades, which resulted
in higher prices and few very successful
hotels,” said Kali.
“In the last five-to-seven years, this
trend has reversed and many new pro-
jects have materialised.”Tri Consulting’s Christopher HewettThe costs structure
of hotels in Oman isrelatively heavy compared to
some other GCC markets”
Zoltan Kali
in April 2019, Accor’s vice president for
development for the Middle East, Jean-
Baptiste Recher, revealed that the com-
pany will be stepping up its Oman pres-
ence.
“We are extremely keen about enter-
ing the Oman market,” he said. We have
several hotels in development, mostly in
Muscat and Salalah. Muscat is more of
a corporate government driven market,
while Salalah is mostly leisure.”
“We have around 10 hotels in develop-
ment in Muscat, mostly under three-to-
four star segments, but nothing in the
luxury category. It’s the same with Sala-
lah, we are entering the market with our
Movenpick brand with one property.”
With one Ibis hotel in Muscat and a
Mercure property in Sohar, Accor has no
current plans for properties in the luxu-
ry market. Recher said, however, there
were a lot of prospects to be explored for
Oman’s high-end hotels.
“We think that Oman, particularly
Muscat, should focus on quality luxury
product. At the moment, there are only
five branded quality hotels in the mar-
ket,” Recher added. “We would say a
brand like Sofitel or Fairmont would do
very well there; we also see an opportu-
nity for a product like Rixos in Salalah.
Something similar to an all-inclusive
concept that is positioned at a luxury
level doesn’t exist in the country.”
MUSCAT’S CHALLENGES
Although there is movement from inter-
national hotel brands, the country’s capi-
tal, Muscat, is set for a challenging future
according to industry experts.
Corporate and regional demand, as
well as economic struggles, has been put-
ting strain on the Muscat hotel sector,
with occupancy levels slowly declining.
Hotel analysis firm Tri Consulting re-
vealed that Muscat’s four and five-star
hotel market has seen an 8.6% drop
in occupancy to 61.3% since February
2018, on the back of weaker demand and
increased supply. The decline in occu-
JW Marriott’s living area at its hotel in Muscat