Three, four and five-star hotels in Oman saw revenues drop to OMR52.98 million ($137 million) in the first quarter of 2016, slipping 8 per cent compared to the same period last year, said a report.

Hotels recorded a 2.4 per cent dip in occupancy rates, declining to 65.3 per cent for the first three months of 2016 - a slight drop from 66.9 per cent for the same period of last year, Times of Oman reported.

This was partly the reason for fall in revenue this Q1 and to some extent due to discounted room rates offered to local residents as part of attracting local people.

Morover, European tourist numbers - which is the largest source market for Oman hotels - have started to decline due to a drop in euro currency value (against dollar) and the unrest in some countries of Europe, which have affected the tendency of people to travel, the report said, citing Vijay Handa, general manager of City Hotel Duqm, Ras Al Jinz Turtle Reserve, Masirah Island Resort and a rest house in Nizwa.

“People are avoiding travel and there is a drop in tourism everywhere, including Asia,” he added.

Among various continents and nationalities, Europeans constituted 45.5 per cent or 156,465 guests in the first quarter of this year, which was followed by Omani nationals (97,732) and Asians (36,826). This was followed by GCC nationals (27,585) Americans (14,495) and other Arabs (14,463).