AUGUST 8, 2022

Hospitality industry in Oman set to record 90% growth in 2022

Muscat – Oman’s hospitality industry is expected to record a year-on-year growth of 90.9 per cent, the fastest in the region, to reach US$700mn in 2022.

The increase can be primarily attributed to an estimated 49.5 per cent growth in tourist arrivals during the year and lower base of 2021 as the sultanate continues to recover from the pandemic, according to Alpen Capital’s GCC Hospitality Industry Report, published on August 3.

Consequently, average daily rate (ADR) is expected to witness a 6.3 per cent growth in 2022 to reach US$146, while the revenue per available room (RevPAR) is expected to surge by 83.7 per cent to US$68.

The Omani government’s initiatives to improve the country’s tourism landscape is expected to be a driving force behind the sector’s development, stated the report.

Between 2022 and 2026, Oman’s hospitality industry is forecast to grow at a compound annual growth rate (CAGR) of 6.3 per cent to reach US$900mn.

Oman aims to earn over US$22.5bn a year from tourism by 2040 and has established plans to set up a cluster of tourism-related investments across the sultanate. These include setting up of theme parks, nature tourism, water parks and entertainment centres in different parts of the country to boost international as well as domestic travel.

The Oman Tourism Development Authority (Omran) recently announced a US$1bn partnership with a Dubai based developer for the first phase of the Yiti Tourism Master Plan, which will focus on developing a sustainable mixed-use project in the sultanate.

The Ministry of Heritage and Tourism also signed multiple agreements to construct tourism projects, including a four-star hotel, a restaurant, and a glass walkway.

‘These projects together are likely to increase international tourist arrivals in the country, which is estimated to grow at a CAGR of 36.9 per cent over the four-year period to reach 3.7mn in 2026,’ the report said.

Consequently, occupancy rates are expected to grow from 47 per cent in 2022 to 54 per cent in 2026.
While ADR is expected to remain flat to reach US$147 in 2026, RevPAR is forecast to grow at a CAGR of four per cent from US$68 in 2022 to US$80 in 2026. The sultanate is expected to increase its room capacity at an annualised growth rate of 2.2 per cent between 2022 and 2026.

Source: Muscat Daily