Oman’s hotel sector recorded revenue growth in the first quarter of 2026 despite weaker demand, according to the latest Oman Hospitality Market Performance Q1 2026 report by real estate advisory and property consultancy Cavendish Maxwell.
Total revenue generated by the country’s 3–5-star hotels reached OMR85.4 million, up 8.4% year-on-year, driven by a 13% increase in room revenues to OMR53.2 million. Revenue performance was strongest at the start of the year, rising 26.8% in January and 8.6% in February, before declining 20.9% in March as travel activity softened.
Average room rates (ARR) increased 15.5% year-on-year to OMR57.5, with rates climbing to OMR58.3 in Januaryand OMR60.9 in February. March ARR remained broadly unchanged year-on-year at OMR49.6, reflecting hotels’ ability to maintain pricing despite lower occupancy.
Hotels welcomed 572,000 guests during Q1, a 5.9% decline compared with the same period last year. Occupancy across Oman’s 3–5-star hotels averaged 56.1%, down from 59.3% in Q1 2025, although January occupancy reached 69.7%, up 10.8% year-on-year.
European travellers remained the largest source market, accounting for 206,000 guests, or 36% of the total, despite an 11.4% decline year-on-year. Omani nationals represented 30.9% of guests, with arrivals increasing 3.1% to 177,000, while Asian travellers accounted for 15.2% of total guests.
“The divergence between revenue growth and lower guest volumes during the quarter indicates that hotels were able to maintain pricing power despite softer demand conditions, particularly during the first two months of the year.”
Khalid Mohamed Al Azri
Director
Oman Convention Bureau
Airport passenger traffic totalled 3.46 million during the quarter, down 2.4% year-on-year. Domestic passenger traffic increased 3.5%, while international passenger volumes declined 3.2%, with international travellers accounting for 86.6%of total airport traffic.
On the supply side, 432 hotel keys were delivered during Q1 2026, with a further 1,200 keys scheduled for completion by year-end, taking total hotel inventory to approximately 41,400 keys. An additional 2,700 keys are expected to be delivered across 2027 and 2028, increasing total supply to around 44,100 keys.
Looking ahead, Cavendish Maxwell said the phased pipeline should help prevent significant oversupply in the near term, while government tourism initiatives, improved connectivity and broader destination development are expected to support long-term growth, although near-term performance will continue to depend on regional travel conditions and visitor confidence.
