Oman Hospitality Market Performance H1 2026
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Executive Summary with Key Trends Oman’s hospitality sector recorded a softer performance in H1 2026, with conditions becoming more challenging in Q2 as regional travel disruptions affected international connectivity and visitor activity. Airport passenger traffic declined by 9.3% year-on-year to 6.3 million, while guest volumes across 3–5-star hotels fell by 13% to 992,000 and occupancy declined to 46.3%. The impact was concentrated in international demand, with international airport passengers declining by 10.8% and European hotel guests falling by 31% year-on-year. Hotel revenues also declined amid the weaker demand environment, falling 12.3% year-on-year to OMR 124.2 million. Room revenue decreased by 11.5%, while other hotel revenue declined by 13.3%, reflecting lower levels of hotel activity and ancillary spending. Average room rates remained marginally above the previous year at OMR 48.7, supported by stronger pricing during Q1 before coming under pressure in Q2. On the supply side, around 400 hotel keys were delivered during H1, all in Q1, with no new completions recorded during Q2. A further 700 keys are scheduled for delivery during the remainder of 2026, taking projected year-end supply to 40,800 keys. This is below the 41,400 keys anticipated at the end of Q1 following the rescheduling of several projects into 2027. The more measured near-term pipeline should help limit additional supply pressure while demand remains subdued. Looking ahead, H2 2026 will be an important period for assessing how the market performs following the disruption seen in Q2. The Khareef season and subsequent winter period should provide seasonal support to tourism activity, while government-led tourism promotion and airline partnerships are expected to support international visibility and connectivity. Domestic demand should also continue to provide a degree of support. However, performance will remain closely linked to international travel flows and broader regional conditions, with the seasonal uplift in H2 providing an important test for the market following the weaker first half.
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Oman Hospitality Market Performance H1 2026
Tourism Sector Overview and Performance Airport Passenger Volume Trends Airport passenger traffic reached 6.3 million in H1 2026, representing a 9.3% decline year-on-year. Performance weakened as the period progressed, with passenger volumes increasing by 8.8% in January before declining in each subsequent month. The first quarter recorded a relatively contained contraction of 2.4%, while the decline deepened to 16.6% in Q2. April registered the steepest monthly fall at 24.5%, followed by a 15.4% decline in May. The rate of contraction moderated to 9.7% in June, indicating some easing in the pace of decline towards the end of the period. The H1 2026 decline continues a trend seen in the previous year rather than representing a sudden reversal. First-half passenger traffic has now contracted for a second consecutive year, following a 2.2% decline in H1 2025, even as full-year volumes continued to increase over the same period. This divergence points to a growing concentration of traffic in the second half of the year. The weaker first-half performance reflects a combination of factors, including reduced international seat capacity and network rationalisation due to regional geopolitical tensions, which have affected both direct travel and passenger connections to Oman. The first half in both years also included Ramadan, which typically results in softer travel activity.
Airport Passenger Volume (in Millions) 20M 18M
17.7M
16M
14.2M
14.5M
14.9M
14M 12M
9.9M
10M 6.3M
8M 6M
4.5M
4.5M
2020
2021
4M 2M 0M
2019
2022 Full Year
Source: Cavendish Maxwell, National Centre for Statistics and Information, Oman Airports
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Oman Hospitality Market Performance H1 2026
2023 H1
2024
2025
H1 2026
While the first half of 2026 presented undeniable challenges for Oman's hospitality sector, the underlying fundamentals remain strong. The resilience of domestic demand, combined with a disciplined supply pipeline, positions the market well for recovery. As we enter the winter months, we expect to see momentum rebuild across key segments.
Khalil Al Zadjali Head of Oman
Domestic passenger traffic remained broadly stable during the period, increasing by 0.6% year-on-year to around 925,000, indicating that domestic travel demand remained relatively steady. In contrast, international passenger traffic declined by 10.8% to 5.4 million. International passengers accounted for 85.3% of total passenger movements in H1 2026, down from 86.7% in the same period last year. Muscat International Airport handled the majority of passenger movements during H1 2026, with 5.7 million passengers, representing an 8.8% decline year-on-year. The contraction was more pronounced at Salalah International Airport, where passenger traffic fell by 14.6% to around 562,000. The decline at Salalah was driven primarily by a sharp reduction in international passenger traffic, which fell by 39.5% year-on-year, while domestic passenger volumes increased by 5.1%. International traffic across both airports was also affected by regional airspace disruptions during the period, which impacted travel patterns and connectivity. Given Salalah’s more seasonal traffic profile, with a significant proportion of annual activity typically concentrated around the Khareef season, the H1 decline should also be considered alongside the stronger performance expected later in the year. Meanwhile, Duqm and Suhar remained marginal to overall passenger movements, together accounting for just 0.4% of total traffic.
Airport Passenger Volume by Airports (%)
90.6% Muscat International Airport
8.9% Salalah International Airport
0.4% Duqm Airport and Suhar International Airport
Source: Cavendish Maxwell, National Centre for Statistics and Information, Oman Airports
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Oman Hospitality Market Performance H1 2026
Number of Guests (3-5 Star Hotels) The number of guests staying in 3–5-star hotels reached 992,000 in H1 2026, representing a 13% year-on-year decline compared with the same period last year. Guest volumes increased by 7.3% year-on-year in January before declining in each of the remaining months. The first quarter recorded a 5.9% decline, while the contraction deepened to 22.1% in Q2. April recorded the steepest decline of the period, with guest numbers falling by 43.3% year-on-year, primarily reflecting regional disruptions that affected air travel across the Gulf, resulting in widespread flight cancellations and postponed bookings during the month. Performance improved notably in May, with the decline narrowing to 2.6% as travel conditions normalised and the extended Eid Al Adha holiday period supported a recovery in domestic and regional travel. June recorded an 11.4% decline, partly reflecting the timing of Eid Al Adha, which fell in June in 2025 and therefore resulted in a higher comparative base.
Total Number of Guests in 3-5 Star Hotel (in Millions) 3M 2.4M
2.5M 2.1M
2.1M
1.8M
2M
1.6M
1.5M
1.2M
1M
0M
1M
0.9M
2019
2020
2021
2022 Full Year
Source: Cavendish Maxwell, National Centre for Statistics and Information
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Oman Hospitality Market Performance H1 2026
2023 H1
2024
2025
H1 2026
Total Number of Guests in (3-5 Stars) Hotel by Nationality Omani nationals represented the largest guest segment for Oman’s 3–5-star hotels in H1 2026, accounting for 39.9% of total guests and increasing by 3.1% year-on-year to 396,000. European guests ranked second, contributing 24.9% of total guests, although their numbers declined by 31% year-on-year to 247,000. Asian guests accounted for 16.4% of total guests and recorded a marginal 0.6% increase to 163,000. Most other segments also recorded lower guest volumes during the period, with guests from the GCC (-16.6%), Other Arab countries (-15.1%), the Americas (-22.1%), Africa (-10.1%) and Oceania (-60.9%) all declining year-on-year. The decline in European guests was the largest contributor to the overall reduction in hotel guest volumes during H1 2026, with the weakness concentrated in Q2. The number of European guests fell by 69.6% year-on-year during the quarter, reducing their share of total guests to 9.2% from 23.5% a year earlier. While this partly reflects the seasonal profile of the European segment, which is typically weighted towards the cooler winter months, the scale of the Q2 decline suggests that factors beyond seasonality also affected demand from European leisure markets. Domestic demand provided a partial offset, with Omani nationals accounting for 52.7% of total guests in Q2 and increasing by 3% year-on-year.
Total Number of Guests in (3-5 Stars) Hotel by Nationality
Source: Cavendish Maxwell, National Centre for Statistics and Information
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Oman Hospitality Market Performance H1 2026
39.9% Omani
3.1%
Americans
24.9% Europeans
1%
Oceanian
16.4% Asians
0.7%
Africans
7%
GCC
2.9%
Not Stated
4.1%
Other Arabs
Hotel Revenues (3-5 Star Hotels) Total revenue generated by Oman’s 3–5-star hotels reached OMR 124.2 million in H1 2026, representing a 12.3% year-on-year decline. Revenue growth was strongest at the beginning of the year, increasing by 26.8% in January and 8.6% in February before turning negative from March onwards. April recorded the sharpest contraction, with revenue falling by 64.5% year-on-year, coinciding with regional disruptions that affected air travel across the Gulf. The pace of decline subsequently moderated to 27.7% in May and 15.5% in June. Room revenue declined by 11.5% year-on-year to OMR 74 million, while other revenue fell by 13.3% to OMR 50.2 million. The sharper decline in other revenue partly reflects the shift in guest composition towards domestic and regional visitors, who typically generate lower ancillary spending per stay than long-haul leisure travellers. Despite weaker hotel operating conditions during H1 2026, employment across Oman’s 3–5-star hotels remained relatively stable, with total employment declining by 2.7% year-on-year to 10,496. The number of Omani employees increased by 3.4%, partly offsetting a 5.6% decline in non-Omani employment.
Total of 3-5 Stars hotel revenue (in Omani Rials Millions) 297.3M
300M 243.4M
250M
229.5M
229.3M
185.8M
200M 150M
124.2M 101.7M 85.3M
100M
50M
0M
2019
2020
2021
2022 Full Year
Source: Cavendish Maxwell, National Centre for Statistics and Information
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Oman Hospitality Market Performance H1 2026
2023 H1
2024
2025
H1 2026
Existing and Future Hotel Room Supply Around 400 hotel keys were delivered in Oman during H1 2026, all of which entered the market in Q1, with no new completions recorded in Q2. A further 700 keys are scheduled for completion during the remainder of 2026, bringing total hotel supply to 40,800 keys by year-end. This is below the 41,400 keys anticipated at the end of Q1, following the rescheduling of several projects into 2027. A further 1,500 keys and 1,600 keys are expected in 2027 and 2028, respectively, taking total inventory to approximately 43,900 keys by the end of 2028. The absence of new completions in Q2 limited the addition of capacity during a period of lower occupancy. The more phased pipeline should help manage near-term supply growth, although the pace of visitor recovery will remain important for the absorption of new capacity. With a relatively limited number of keys scheduled for delivery in the near term, supply growth is unlikely to be a major constraint in the short term, while the larger pipeline expected from 2027 onwards will be more dependent on the recovery in visitor demand.
Hotel Room Supply - Number of Rooms (in Thousands) 45k
42.3k 39.7k
40.8k 1.5k
0.7k 0.4k
40k
43.9k 1.6k
35.9k
35k
32.8k 30.3k
30k
29.1k 39.7k
39.7k
40.8k
42.3k
2025
2026 (E*)
2027 (F*)
2028 (F*)
35.9k
25k
20k
29.1k
2021
30.3k
2022 Existing Supply
32.8k
2023
2024
Projected Supply
Completed Supply
Source: Cavendish Maxwell, MEED Projects *The overall hotel room supply comprises 1- to 5-star hotels, unclassified hotels, hotel apartments, and guest houses.
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Oman Hospitality Market Performance H1 2026
Upcoming Supply
Total
Occupancy Rates (3-5 Star Hotels) The occupancy rate across Oman’s 3–5-star hotels averaged 46.3% in H1 2026, down from 54.6% recorded during the same period last year. Performance held firm at the start of the year, with occupancy averaging close to 70% across January and February, before weakening progressively from March onwards. The decline was most acute in Q2, as regional geopolitical tensions disrupted air travel across the Gulf and weighed on international visitor flows. April recorded the sharpest contraction of the period, with flight disruptions and cancellations significantly curtailing international travel during the month. Domestic tourism continued to provide some support, partially offsetting the weakness in international demand, although this was not sufficient to compensate for the decline in visitor volumes.
Monthly Occupancy Rates for 3–5 Star Hotels (%) 100
80
69.7
72.5
67.4
65.8
62.9
60
47.6
42.6 31.3
40
32.3
38.7
36.5
35.9
20
0
January
February
March
April 2025
Source: Cavendish Maxwell, National Centre for Statistics and Information
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Oman Hospitality Market Performance H1 2026
2026
May
June
Average Room Rates in Omani Rials (3-5 Star Hotels) The average room rate (ARR) across Oman’s 3–5-star hotels recorded a mixed performance during H1 2026, reflecting the uneven demand conditions throughout the period. Rate performance was strongest at the start of the year, with ARR rising 18.7% year-on-year to OMR 58.3 in January and 20.4% to OMR 60.9 in February. In March, ARR remained broadly unchanged at OMR 49.6, increasing marginally by 0.2% year-on-year as demand began to soften. Performance weakened in Q2, with April recording the sharpest decline of the period as ARR fell 42.9% year-on-year to OMR 30.6. The drop in rates, alongside the sharp decline in occupancy, suggests that hotels adjusted pricing in response to weaker demand, although this was not enough to offset the impact of regional travel disruptions. ARR partially recovered in May, increasing by 8.3% year-on-year to OMR 43.7, with the Eid Al Adha holiday period providing some support. Rates declined again in June, falling 20.7% year-on-year to OMR 29.2, partly reflecting the higher comparative base in June 2025, when Eid Al Adha fell during the month.
Monthly Average Room Rates for 3–5 Star Hotels (in Omani Rials) 70
60.9 58.3
60
53.6 49.1
50.6
49.5
49.6
50
40.3
43.7 36.8
40
30.6
29.2
30 20 10 0
January
February
March
April 2025
Source: Cavendish Maxwell, National Centre for Statistics and Information
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Oman Hospitality Market Performance H1 2026
2026
May
June
Hospitality Market Outlook Oman’s hospitality sector enters H2 2026 against a challenging demand environment, following a first half marked by regional geopolitical tensions and disruption to international travel. The impact was most evident in Q2, when hotel occupancy and room rates came under pressure as visitor flows weakened. While the outlook remains sensitive to prevailing travel conditions, the second half typically accounts for a significant share of annual activity, with July to December contributing approximately 52% of annual hotel revenue and guest volumes in 2025. At the same time, the Khareef season in Dhofar will be a key driver of performance in the coming months, particularly as Salalah enters its peak tourism period. Performance during the season will provide an indication of how effectively seasonal demand can support the wider market following the disruption. Domestic tourism should continue to provide a degree of support, although a broader improvement in demand will also depend on international visitor volumes and air connectivity. Government and tourism-sector initiatives should provide an additional layer of support to demand during H2. The Ministry of Heritage and Tourism continues to strengthen international promotion through targeted campaigns and partnerships with airlines and travel trade partners, while marketing activity around Dhofar has expanded across Oman and key GCC markets. However, the impact of these initiatives is expected to materialise gradually, with near-term performance remaining closely linked to regional travel conditions and visitor demand. On the supply side, the limited number of hotel completions expected during the remainder of 2026 should help contain additional competitive pressure in the near term. Overall, H2 performance is likely to be shaped by the seasonal uplift in Dhofar, tourism-sector promotion and international visitor flows, while the wider regional environment will remain an important factor for the sector.
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Oman Hospitality Market Performance H1 2026
Authors Julian Roche
Ali Siddiqui Ali Siddiqui
Chief Economist Cavendish Maxwell julian.roche@cavendishmaxwell.com
Research Manager Research Manager ali.siddiqui@cavendishmaxwell.com ali.siddiqui@cavendishmaxwell.com +971 +971 50 877 50 0190 877 0190
Key Contacts Khalil Al Zadjali
Tamas Steinfeld Ahmed Al Shukairi
Siraj Siraj Ahmed Ahmed
Zacky ZackySajjad Sajjad
Head of Oman khalil.alzadjali@cavendishmaxwell.com +968 92 511 188
Senior Valuer Director, Commercial Valuation tamas.steinfeld@cavendishmaxwell.com ahmed.alshukairi@cavendishmaxwell.com +968 91 71 700 973 187 451
Director, Business Development and Client Relations Director, Business Development & Client Relations zacky.sajjad@cavendishmaxwell.com zacky.sajjad@cavendishmaxwell.com +971 50 644 5089 +971 50 644 5089
Director, Director, Head Head of of Strategy and Consulting siraj.ahmed@cavendishmaxwell.com siraj.ahmed@cavendishmaxwell.com +971 +97150 50382 3824409 4409
Oman +968 24 694 150 Villa 836 Way 3012, Al Sarooj, P.O. Box 3438 Muscat, Sultanate of Oman Dubai
Abu Dhabi
Sharjah
Ajman
Ras Al Khaimah
Muscat
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Riyadh
cavendishmaxwell.com
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