Saturday 20 / April / 2024
Muscat: Luxury hotel rates in Oman have fallen by nearly 40 per cent this winter, owing to the challenging economic situations and a drop in demand.
Data provided to Times of Oman by leading hotels, on condition of anonymity, indicate that hotel occupancy levels have fallen by at least 10 per cent during the winter season, leading to a revision of rates by the management.
“Due to the worsening economic situation around the world, and low oil prices in the region, overall sales in room rates in 4 and 5 star properties continue to decline,” said a statement from a hotel.
Vision 2040
The Ministry of Tourism has recently revealed its Vision 2040, and aims to double the number of tourists visiting Oman, to nearly five million per year. This would create opportunities for hotels to add more rooms to accommodate the influx of tourists that is planned, however, hotels say that although supply has been increasing steeply, demand has not been rising fast enough and, therefore, changes in prices will continue.
“The additional hotel room inventory, entering in the year, which is mainly in Muscat, did put more pressure on hotels to review product-price-value offers, and is expected to continue to go forward,” the statement said.
According to Sunil Prabhakar, CEO of Travel Point, occupancy rates have declined and prices have followed. “We estimate that occupancy rates have fallen below 60 per cent and, therefore, hotels have decreased prices. The drop in rates has been high, up to 40 per cent, which does not happen if hotel occupancy levels are above 65 per cent,” he said.
Decline in revenues
Previously, the National Centre for Statistical Information (NCSI) reported a decline of 36 per cent in hotel revenues in the first half of 2016. The report further suggests a decrease in the number of tourists visiting Oman, with tourist arrivals dropping 19 per cent, when compared to the same period in 2015.
Maaz Firdous, a consultant at Al Iskaan Engineering and a regular visitor to hotels around the region, said revised prices are not just a welcome move, but
a necessity.
“While many see it only as a good move, I believe it is necessary to revise prices. Hotel rates in Oman are higher than many European countries. We need to attract more people, and with such high rates, even our exceptional potential is not enough to woo visitors to Oman,” he said.
“In my opinion, this is the best time to book a room in hotels around Oman. I doubt if prices or temperatures will stay this low for long,” he added
The travel industry has declined due to the economic slowdown and geo-political instability in the region. Regional airlines have seen huge drops in passengers, with Emirates and Etihad posting declining revenues and resorting to restructuring to improve profitability.
Aamir Patel, a chartered accountant, said that times are challenging, and lowering rates of rooms and hotel facilities is going to make Oman a competitive
destination.
“I have booked a 5 star hotel for New Year’s Eve, and it cost me nearly 30 per cent less than last year. Certainly, this is the cheapest I have paid to stay in a hotel in Oman. As more hotels are built, tourists will have more options in Oman, and this will lead to more competitive rates.
The overall results will be that more tourists consider Oman as their holiday destination, without digging deep into their pockets just for a luxury hotel stay,”
he said.
