02 July 2015
Despite a number of challenges such as the fall in oil prices and devaluation of the euro against the dollar, Oman continued its strategy of "slow and steady growth" in its capital city. Revealing this, PwC's Middle East forecast report predicted a 1.2 per cent drop in revenue per available room (RevPAR) in Muscat this year, partly due to competition from the two neighbouring emirates and weaker average daily rates (ADR). Strong competition from Fujairah and Ras Al Khaimah is likely to hit hotel performance in Muscat for the remainder of this year, with revenue per available room (RevPAR) forecast to fall, according to the report.

It added that Muscat's occupancy and ADR levels reached 66 per cent and $231 respectively in 2014. "Looking forward to 2015-16, economic growth and continued infrastructure spend and increase in number of tourist is likely to support future growth. However many of the challenges experienced the second half of 2014 will continue in 2015, resulting in a forecasted decline in RevPar of 1.2 per cent in Muscat," the report said. However, it added that stronger RevPAR growth in Muscat is expected from 2016, with the city posting growth of 8 per cent. "The positive outlook in 2016 is driven by growth in both ADR and occupancy, reflecting continued infrastructure spend, moderate supply increases, and the increase in tourist numbers that will result from Government promotional programmes," PwC said.

The Government is supporting the growth of tourism with new infrastructure, including expanding the main airport. The ferry terminal is also being upgraded, which may drive increased tourism. Room numbers are set to double over the next three years, with close to 350 rooms recently opened, and 990 due for construction. Kenneth Macfarlane, Oman country senior partner, said: "The outlook for Muscat, is 'more of the same', in a positive sense. It's an under-marketed destination, with a lot of potential, and a well-considered plan for sustainable long-term growth. "The diverse landscape across Oman, together with the major development projects, is positioning the city well for sustained future growth. Oman's vision includes delivering $1bn of tourism revenues by 2020."

© Oman Daily Observer 2015