The first quarter reports filed by hospitality sector companies, in combination with data by the National Centre for Statistics and Information (NCSI), show that revenues were down by 0.6 per cent to RO16.7mn from RO16.8mn, reported in the first quarter of 2015.

NCSI indicators for three to five star hotels for Q1 2016 show that although the number of guests increased by 11.7 per cent (from 113,296 in 2015 to 126,505 in 2016), the occupancy rate was down by 10.3 per cent from 65.9 per cent in Q1 2015 to 59.1 per cent in Q1 2016.

Ubar Hotels and Resorts, owner of Golden Tulip Nizwa and Park Inn by Radisson Muscat, in its first quarter report stated that the overall business scenario was almost similar to last year for the Oman hospitality industry. 'Drop in oil prices has affected the entire economy, including the tourism sector. Weakened euro also has a negative impact...as it has resulted in Oman becoming an expensive destination for tourism. Travellers are diverting to other countries especially Egypt, Iran, Jordan which are cheaper destinations and once again gaining popularity among European travellers,' the company said.

The company generated a consolidated revenue of RO1,488,948, which is lower by eight per cent as compared to Q1 2015. The consolidated net profit of RO344,111 has also declined by 16 per cent, compared to the first quarter of last year.

Salalah Beach Resort, which owns Hilton Salalah Resort, said in its first quarter report that it recorded a total revenue of RO918,144 (2015:RO986,814) for three months ended on March 31, 2016 and the net profit was RO142,476 (2015:RO217,919).

'Drop in revenue is due to lower average room rate in the current year as well as lower food and beverage revenue. Apart from that, net profit has also been impacted by higher expenses during the quarter.'

The company added that it is actively engaging with the Hilton Worldwide Manage Limited to undertake various steps to improve the hotel's performance during the rest of the year, 'although the hotel continues to face challenges due to market conditions as well as ongoing construction on the adjacent plot'.

Gulf Hotels (Oman) Company, which owns Crowne Plaza Muscat, stated that it has achieved a total revenue of RO2.662mn (Q1 2015:RO2.912mn) and a net profit of RO0.805mn (2015:RO0.988mn) for Q1 2016. 'During the period there was decrease of 8.6 per cent in total revenue as compared to same period last year due to decrease in occupancy and room rates.

The operating profit and net profit decreased by 16.2 per cent and 18.5 per cent respectively as compared to Q1 2015,' the company said. It added that occupancy and room rates may continue to be lower in the second and third quarters.

Ubar Hotels and Resorts added that it is looking at alternative and new market sources to generate extra business to offset the deficit. 'Considering the drop in the business being generated from group travellers, the management is emphasising more on Free Independent Travellers (FIT).'

Hotels Management Company International, which owns The Chedi Muscat, generated total revenue of RO3.416mn (against RO3.821mn in Q1 2015) and earned a net profit of RO1.034mn (against RO1.299mn in Q1 2015) in the first quarter of 2016.