Oman hotel licence limits signal ‘desire to enhance quality’

Reuters/Hamad I Mohammed

• Clampdown in Muscat
• Hotel guests up 30%
• Occupancy rates up 9%

The decision by Oman to impose restrictions on new hotel developments across the sultanate demonstrates a focus on quality over quantity, an industry analyst says.

From February 1, Oman’s Ministry of Heritage and Tourism will not accept any requests for new hotels in the Muscat governorate, aside from Quriyat and Al Amerat. Applications for hotel apartments in Salalah will also be refused.

It is understood Oman’s hotel restrictions have been introduced to tackle the current imbalance in hotel accommodation in the country.

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“By putting a temporary hold on new hotel licences, the Omani authorities may be signalling a desire to enhance the quality and competitiveness of existing accommodations, rather than increasing numbers,” said Dr Sean Lochrie, assistant professor at Heriot-Watt University Dubai.

There were 674 hotels in Oman in 2022, the most recent government statistics show.

In 2016 Oman launched a 25-year strategy to increase the number of tourists visiting the country more than fourfold, from 2.6 million in 2015 to 11.7 million a year by 2040.

It wants to increase tourism’s contribution to the country’s GDP to 6 percent, from 2.6 percent, by building new hotels and promoting destination “clusters”.

“Existing establishments may witness increased demand, while innovative strategies may be required to enhance service quality and maintain international competitiveness,” Lochrie said.

In July last year the Ministry of Heritage and Tourism approved 19 licences for integrated tourism complexes, with 81 hotel facilities totalling more than 16,500 rooms and 42,600 housing units, worth around RO4.376 billion ($11.33 billion).

Projects in Muscat, Dhofar, South Al Sharqiyah, South Al Batinah and Musandam were also agreed.

The number of hotel guests in Oman increased by 30.3 percent to 1.88 million in the first 11 months of 2023, from 1.45 million in the same period a year before.

Occupancy rates were up 9 percent year on year.