Oman’s hospitality sector is experiencing a landmark year in 2025, driven by record hotel revenues, rising international arrivals, bold tax reforms, and a wave of luxury hotel openings that are putting the sultanate firmly on the global tourism map. The strong performance reflects the alignment of government policy, private sector investment, and the nation’s Vision 2040 strategy, which places tourism at the core of economic diversification.
Record-Breaking Growth in Tourism
In the first half of 2025, hotel revenues surged 18.2% year-on-year, reaching OMR 141.21 million (US$367 million), while tourist arrivals hit 1.14 million — a 9.2% increase compared to 2024. Occupancy rates climbed to 54.7%, up from 47.8% a year earlier.
European visitors led the growth, accounting for 40% of arrivals, while Oceania and Africa posted the steepest increases, with gains of 57.9% and 40.6% respectively. Tourism Minister Salim bin Mohammed Al Mahrouqi attributed the success to “aggressive campaigns in the last two years,” alongside strengthened promotions in Europe, Asia, and Oceania and the establishment of new marketing offices abroad.
Expanding Connectivity and Seasonal Boosts
Improved air connectivity has further accelerated growth. New routes such as Muscat–Amsterdam launched this summer, while Oman Air partnered with TUI to create Oman Air Holidays, a digital booking platform that integrates travel packages to boost inbound tourism. Seasonal demand has also played a role, with the Khareef season driving a 5% year-on-year increase in Salalah Airport traffic, handling more than 288,000 passengers in just six weeks.
Cruise tourism is also expanding, with Celestyal Cruises and Aroya Cruises launching Arabian Gulf itineraries featuring stops in Muscat, Khasab, and Salalah, enhancing Oman’s visibility as a maritime hub.
Wave of Luxury Hotel Openings
Oman is set to add a new tier of luxury hospitality in 2025, with landmark openings reshaping the country’s tourism offering.
voco Muscat Al Mouj (IHG): Debuting in late 2025 with 251 beachfront rooms, multiple dining outlets, a spa, and premium meeting facilities, marking the brand’s first entry into Oman.
SOCIO by The Lux Collective: Launching in Sultan Haitham City, Muscat, the project combines 170 hotel rooms with 219 serviced and non-serviced apartments, offering a blend of luxury and community-driven living in Oman’s first smart city.
JW Marriott Muscat: Set to become one of Oman’s flagship luxury hotels, underscoring the nation’s commitment to world-class service and global hospitality excellence.
These openings add to an already strong portfolio, which includes Mandarin Oriental Muscat and St. Regis Al Mouj, and reinforce Oman’s ambition to double international arrivals to six million annually by 2030 and reach 12 million by 2040.
Fiscal Reforms to Support Sustainable Growth
In parallel, Oman has introduced new fiscal policies designed to balance growth with sustainability. A 4% tourism tax on hotels and restaurants took effect in March 2025, earmarked for reinvestment into infrastructure and eco-tourism projects. VAT remains at 5% but now includes refund mechanisms for military and security forces, while an upcoming nationwide e-invoicing system aims to simplify tax compliance for hospitality businesses.
These measures are complemented by incentives for SMEs, ensuring broader participation in tourism growth. Together, they create a more competitive, transparent, and sustainable fiscal environment for investors and operators.
Vision 2040: Tourism as an Economic Pillar
Tourism development remains central to Oman Vision 2040, with US$31 billion committed to sectoral growth, including US$5.9 billion for new resorts and projects. Beyond hospitality, the strategy emphasizes eco-tourism, cultural heritage promotion, and green tourism practices to align expansion with long-term sustainability goals.
Outlook: A Bright Future for Oman’s Hospitality
With strong half-year results, expanded connectivity, new luxury offerings, and smart fiscal reforms, Oman is entering an ambitious new chapter in its tourism journey. By carefully balancing growth with sustainability, the sultanate is not only enriching visitor experiences but also ensuring tourism’s role as a lasting driver of economic diversification.
Oman’s blend of cultural authenticity, natural beauty, and luxury hospitality now positions it as one of the Middle East’s most compelling tourism destinations — a rising star for discerning travelers worldwide.
Sources: connectingtravel.com, Times of India
