Oman’s hotel sector recorded a difficult first half of 2026, with regional travel disruptions dampening international arrivals and pushing revenues, occupancy, and guest volumes sharply lower, according to research from real estate and hospitality consultancy Cavendish Maxwell.
Three-to-five star hotels across the country welcomed 992,000 guests in H1 2026, down 13 per cent on the same period last year. Total revenue for that segment reached OMR124.2 million (US$322.7 million), a decline of around 12 per cent against H1 2025. Airport passenger traffic fell 9.3 per cent to 6.3 million over the same period.
The disruption was uneven across the half. January and February delivered strong year-on-year growth in revenues and average room rates, with ARR up nearly 19 per cent in January to OMR58.3 (US$151.6) and more than 20 per cent in February to almost OMR61 (US$158.4). The picture deteriorated sharply from March. April was the worst month, with revenues falling 64.5 per cent year-on-year and ARR down around 43 per cent. Both metrics began to recover in May, aided in part by Eid Al Adha travel demand.
Occupancy averaged 46.3 per cent across H1, more than half the level recorded in the same period last year. Levels were around 70 per cent in January and February before declining through Q2 as regional tensions weighed on international connectivity. Domestic visitors provided some buffer, Cavendish Maxwell noted, but not enough to offset the shortfall in international arrivals.
Omani nationals were the largest source market in H1, accounting for 396,000 guests, or nearly 40 per cent of all visitors, up 3.1 per cent year-on-year. Europeans were second at 247,000 guests but their numbers dropped 31 per cent. Most other source markets also declined: GCC visitors were down 17 per cent, the Americas down 22 per cent, and Oceania down 61 per cent.
On the supply side, Oman added 400 new rooms in H1, all delivered in Q1. A further 700 are expected before the end of 2026, bringing total inventory to 40,800 keys. That figure is slightly below the 41,400 previously forecast, as some projects have been pushed back to 2027. A further 1,500 rooms are scheduled for that year and 1,600 in 2028, which would take total inventory to 43,900.
“Oman’s hospitality sector entered H2 in a challenging environment. While the outlook remains sensitive to prevailing travel conditions, the July to December period typically accounts for a significant share of tourism activity, contributing 52% in hotel revenue and guest volumes last year. The recent Khareef season – Salalah’s peak tourism period – coupled with the upcoming winter months will indicate how effectively seasonal demand supports the wider market following the H1 disruption, which was most pronounced in the second quarter. Government and tourism sector initiatives – such as international promotions and partnerships with airlines and travel trade partners – should also help strengthen demand,” Khalil Al Zadjali, Head of Oman at Cavendish Maxwell said in a statement.
On the employment side, Omani nationals working in the hospitality sector rose 3.4 per cent in H1, though total industry employment declined 2.7 per cent year-on-year to just under 10,500 at the end of June.
