Oman tourism: Tariffs drop as more hotels open doors

Muscat: Room rates in Oman have dropped as more hotels have opened their doors.
The cost of a hotel room in Oman dropped by almost nine per cent over the last three months as more hotels opened up across the Sultanate, according to global research data.
“During the 2005 to 2016 period, hotel supply in Muscat tripled from 2,900 to 9,600 keys. This pace of expansion is also expected to be maintained moving forward, with almost 3,400 keys currently under construction and expected to become operational by 2018, with a further nine thousand new rooms to open by 2021, depending on the pace of planned and on-hold projects,” according to the latest Oman Market View by global real estate consultancy firm CBRE.
With a number of major new additions to the hotel market during the first half of the year, pressure on Average Daily Rate (ADR) at hotel rooms has remained intense, with an 8.9 per cent decrease for the period June year-to-date, as rates dipped to OMR65.89 per room per night from OMR71.81 per room per night in the same period last year,” CBRE added.
Revenue per available room (RevPAR) also saw a notable decline, falling from OMR42.79 per room per night in the first half of 2016 to OMR39.82 per room per night in 2017, reflecting a 6.9 percent drop, as per data from STR Global.
Foreseeing the drop, Firas Rashid, director of Sales and Marketing, Anantara Jabal Akhtar, said: “It is true that the cost of hotel rooms will go down as the number of hotels increases, but we must also remember that the number of tourists coming to Oman is also increasing organically, year on year. One of the reasons for that is the new airport, which will bring more flights to Oman and connect the country with more direct routes.”
“We are primarily looking at tourists from three new locations: Iran, China and India, and we expect to see many tourists coming from these countries in the future. Even then, though, if we compare Oman’s room rates to those in the United Arab Emirates (UAE), room rates are more expensive and the connectivity there is more, because there is greater access to shopping malls, restaurants, transport facilities etc., and we need that here as well.”
“When we get a request from groups coming to the Middle East to spend a holiday, many people are surprised at the cost of hotels in Oman, because in the UAE, for example, you can get five-star hotels for about OMR40, and despite this, the booking rates next door have dropped by about 20 percent.”
“Dubai’s airport though sees many more visitors and that is why it is such a popular tourist destination, but that is now at the ceiling, so we should see more visitors coming to Oman in the future,” Rashid added.
Another hotelier based in Sohar said prices have started dropping with more hotels opening up. “We have no other option, but to lower our rates to woo more guests,” he said. CBRE also said Oman is investing heavily in its tourism and hospitality sector, as the Sultanate aims to host seven million tourists by 2040, including 2.7 million in Muscat.
Commenting on the report, Mat Green, head of Research and Consulting, CBRE Middle East said, “The ongoing construction of various internationally branded hotels, including the Westin, W, JW Marriott and Kempinski, will better cater to corporate demand and help attract a rising proportion of leisure orientated demand from the GCC (Gulf Cooperation Council) and transit leisure business for tourist groups visiting the Sultanate.”