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Oman hotel sector to suffer RevPAR loss

MUSCAT, July 21, 2016

Oman hotels are expected to see revenue per available room (RevPAR) continue to decline despite forecasts of a significant boost this year from the planned opening of new properties, said a report.

"For the next year a large number of uncompetitive hotels will fail. This has already started with many hotels facing financial pressure. In a bit of crystal ball gazing the industry will be far more stabilised and profitable in 2018", said a report in the Oman Daily Observer citing Mac Thomson, CEO of Midan Muscat International Services.

The revenue loss is not restricted to Oman alone, the entire Mena region is seen to suffer double digit fall, the report said.

The regional decline is a result of lower oil price and the ongoing security concerns for the region as a whole.

According to reports from Colliers, Oman sees further complications as the number of hotel rooms continue to increase. An increase in rooms at a time of lean tourist season (business or leisure) clearly leads to a drop in RevPAR. On top of this, it is standard business practice for new hotels to enter the market with lower room rates. This is designed to promote their property and to generate immediate interest, altogether puting strong downward pressure on RevPAR, the global agency noted in its first quarter report.

By 2020, Oman is estimated to have more than 20,000 hotel rooms, which will further boost the country's ambitious tourism growth strategy that hopes to attract 5 million visitors a year by 2040.

Among hotel operators entering the country for the first time are the Anantara Group which will open two five-star resorts in the mountains of Jabal Akhdhar and the south of the country at Salalah.
 




Tags: Oman | hotels | RevPAR | decline |

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