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Oman’s hotel industry continues to reel from pandemic impact

28 Jul 2021

Oman’s hotel industry continues to reel from historic drop in revenues and mounting losses due to the impact of the COVID-19 pandemic.

More than 16 months into the pandemic, hotels in Oman are still struggling with low occupancy rates amid ongoing travel restrictions around the world. 

Latest data released by the National Center for Statistics and Information (NCSI) still paints a gloomy picture for the hotel industry. Total revenues of Omani hotels – within 3 to 5 star categories – further plunged by 35.8 per cent to RO37mn in the first half of 2021 compared to RO57.67mn recorded in the same period of 2020.

Hotels are among the hardest hit sectors by the impact of the COVID-19 pandemic. The data shows that the sultanate’s hospitality sector face growing financial stress as hotels face a dearth of guests and tourists amid travel restrictions.

Mounting losses

With very low occupancy rates due to the pandemic, hotels are facing revenues collapse and mounting losses. Overall occupancy rates in Oman’s 3 to 5 star category hotels still remain very low at 34 per cent during January–June period of 2021 compared with 32.8 per cent occupancy recorded in the same period a year ago, the NCSI data showed.

Salalah Beach Resort Company, a luxury 5-star resort that offers a beachfront location in Dhofar, reported a net loss of more than RO475,000 for the first half of 2021 against a net loss of RO303,818 in the same period of 2020.

In its financial report submitted to the Muscat Stock Exchange (MSX), Salalah Beach Resort said its various projects planned earlier are on hold and discussions are ongoing with hotel operators to defer such investments until the situation improves and stabilizes.

The MSX-listed Hotels Management Company International, which owns and operates The Chedi Muscat Hotel, reported a net loss of RO1.192mn for the first half of 2021.

‘The vaccination campaign has gained momentum and if the authorities maintain the same pace, Oman will soon be taken out of red list in most of our main source markets,’ Hotels Management Company International said in its financial report.

Ubhar Hotels & Resorts Company announced a net loss of more than RO499,000 for the first half of this year against a net loss of RO316,952 in the same period of 2020. Ubhar Hotels & Resorts Company and its subsidiary own and operate Golden Tulip Hotel, Nizwa and Park Inn Hotel, Muscat.

Meanwhile, total number of guests at Oman’s hotels increased 22.6 per cent to  reach 522,329 during six months ended June 2021 from 425,905 guests in the same period of 2020.

The NCSI statistics showed that domestic guests seem to have supported the sultanate’s hotels to stay afloat despite restrictions due to the pandemic. Many hotels, since the beginning of 2021, had announced promotional packages and staycation offers to attract Omani citizens and residents.

Number of Omani guests rose by 164 per cent to 369,666 in the first half of 2021 from 139,798 Omani guests during the same period in 2020. This was followed by 74,127 Asian guests this year compared to 42,722 in the first half of 2020, comprising a rise by 73.5 per cent.

Number of GCC guests reached 6,318 followed by the Oceanians with 2,956, the Africans with 1,966, and 15,458 guests from other nationalities. Number of Arab guests (non-GCC) reached 21,630 during January – June period while the European guests stood at 21,215 and Americans at 8,993.

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