Muscat: Oman’s hospitality sector recorded a softer performance in Q1 2026, with key demand indicators moderating during the quarter. 

Airport passenger traffic declined by 2.4% year-on-year, while guest volumes in 3–5-star hotels decreased by 5.9% and occupancy declined by 5.4% year-on-year. 

Cavendish Maxwell’s latest analysis of Oman’s hospitality sector reveals that hotels welcomed 572,000 guests in Q1. Year-on-year, check-ins in January rose more than 7% compared to January 2025, but, overall, Q1 saw guest numbers decline.

Performance was stronger at the start of the year before weakening in February and March, reflecting shifting seasonal travel patterns following the earlier timing of Ramadan, alongside regional airspace disruptions that affected travel activity towards the end of the quarter.

Quarterly hotel revenues in Oman rose 8.4% year-on-year to OMR85.4 million in Q1 2026, says leading real estate advisory and hospitality sector property consultant, Cavendish Maxwell.

The sustained revenue growth – achieved despite a softer hospitality sector performance during the quarter – was primarily driven by room revenues, which climbed 13% to RO53.2 million, the company said.

Revenue performance was strongest at the start of the year, increasing almost 27% in January and nearly 9% in February compared to January and February last year. March revenues declined 21% against March 2025.

Average room rates climbed 15.5% year-on-year to reach OMR57.5 in Q1, supported by robust performance in January (OMR58.3) and February (OMR61), representing increases of nearly 19% and more than 20% against the same months last year. The March 2026 average room rate of just under OMR50 was on a par with that of March 2025.

Khalil Al Zadjali, Head of Oman at Cavendish Maxwell, said: “The divergence between revenue and room rate growth and lower guest volumes in Q1 shows that Oman hotels maintained their pricing power despite reduced occupancy during the quarter. In addition, employment in the hospitality sector expanded in Q1, with the job market growing 2.1% compared to the same period last year. By the end of March, Oman’s hotel industry employed nearly 11,300 people.

Occupancy rates at Oman’s 3- to 5-star hotels peaked in January at almost 70%, a jump of nearly 11% from January 2025, before contracting in February and March. Average occupancy across Q1 stood at just over 56%, down around 5% on the same time last year.

Despite softer demand conditions, hotel revenues remained supported, increasing by 8.4% year-on-year during the quarter. Revenue growth was primarily driven by room revenues, which increased by 13%, supported by stronger performance during January and February, when average room rates recorded strong year-on-year growth. While guest volumes moderated during February and March, hotels were able to sustain revenue growth through February before revenues declined in March as travel activity weakened further.

On the supply side, around 430 hotel keys were delivered during Q1 2026, with a further pipeline expected to increase total inventory to approximately 41,400 keys by year-end. The phased nature of upcoming supply should help limit near-term pressure on market performance, though absorption will ultimately depend on how quickly visitor volumes normalise.

Looking ahead, government initiatives aimed at strengthening Oman’s tourism proposition are expected to support longer-term demand growth and contribute to a more diversified tourism base. However, the impact of these initiatives is expected to materialise gradually, with near-term performance continuing to depend on broader travel conditions in the region and visitor sentiment.

Oman’s hospitality market faced some demand pressure in Q1 2026, partly linked to shifting seasonal travel patterns and regional disruptions. 

Even so, hotels continued to record revenue growth, supported by stronger room rates. Looking ahead, the combination of measured supply growth and continued tourism initiatives should help support the sector’s long-term development.