24/08/2016 06:14 AST
Oman’s hospitality market is expected to grow at a compounded annual growth rate (CAGR) of 6.2 per cent from 2015 to reach $1 billion in 2020.
This growth is attributed to a 5.3 per cent annual rise in hotels and serviced apartment room inventory and a 6.3 per cent increase in international tourist arrivals, according to the GCC Hospitality Industry report published by Alpen Capital, an investment banking advisory firm.
The report said that Oman government’s tourism plan to double tourist arrivals by 2040 by developing tourist spots and encouraging private investments is likely to boost demand.
Thus, increase in tourist arrivals is likely to result in occupancy rates and average daily rates (ADRs) in the Sultanate’s hotels and serviced apartments to grow by 1 percentage points and 0.3 per cent CAGR, respectively, during 2015 to 2020.
The slow growth is primarily due to the decline anticipated in 2016, after which the country’s key hospitality indicators is expected to grow steadily. As a result, the aggregate revenue per available room (RevPAR) of hotels and serviced apartments is projected to grow at a CAGR of 0.6 per cent to reach $132 by 2020.
Key growth drivers
As a part of the 2040 tourism strategy, Oman’s Ministry of Tourism plans to invest $35 billion to develop the sector with an aim to double tourist arrivals to five million by 2040. The ministry is pushing on the redevelopment of Muscat International Airport and fleet expansion of Oman Air to accommodate the anticipated rise in passengers.
Further, it intends to increase hospitality capacity to 80,000 keys by 2040, of which 30,000 will be holiday homes, 17,000 smaller housing units and 33,000 hotel rooms.
With the expected launch of the Oman Convention and Exhibition Centre in the second half of 2016, the Oman government is looking to become a major regional centre for meeting, incentives, conference and exhibition (MICE) events. An increase in events hosted at the convention centre is likely to attract more business travellers, thus benefiting the hospitality sector.
Oman offers a range of cultural and sports activities like scuba diving, boat trips, dolphin watching, Royal Opera House, and the national museum. The upcoming Duqm tourist complex featuring a mall, hotels, entertainment centre, and water theme park is likely to have a large impact on tourism.
The GCC Hospitality Industry report also covers recent trends, growth drivers, and challenges in the industry. It profiles some of the renowned hospitality companies in the GCC, while evaluating their financial and market valuation metrics vis-à-vis their regional as well as international counterparts.
“Backed by an active tourism market, the GCC hospitality industry remains firm on its growth trajectory. Though drop in oil prices and currency depreciation is currently affecting demand, the sector’s long-term outlook remains strong. Government measures to bolster tourism activities in the region like encouraging private sector investments, building new attractions, expanding airport capacity, and increasing international promotion campaigns are providing impetus to the growth of the hospitality sector in the region. A thriving segment of MICE, spate of technological advancements, and brisk development of midscale hotel properties are amongst the key factors elevating the appeal of the GCC hospitality sector,” said Sameena Ahmad, managing director of Alpen Capital (ME) Limited.
“The GCC is witnessing a significant growth in hotel properties, despite the region’s macroeconomic challenges. Several international hotel chains have established significant presence in the region to capture a slice of the burgeoning tourism industry. Massive infrastructure developments and hotel projects are underway to meet the demands of the tourist inflow expected into the region for the upcoming mega even
Times of Oman
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