Oman is building tourism supply and demand together as it courts a different tourist demographic

Oman is trying to scale a tourism model built around what differentiates it from the Gulf’s bigger destinations: Nature, heritage, adventure, and lower-density development rather than high-volume urban and resort tourism.

That model is now shaping the country’s investment pipeline. The Sultanate is lining up OMR bns in tourism, hospitality, and mixed-use projects across Muscat, Duqm, and Dhofar, while expanding the international marketing and air links intended to support demand to fill them. But the first half of this year has already tested that strategy, as hotel guest numbers and occupancy fell even as the supply kept developing.

“The country is pursuing a more differentiated approach centred on economic diversification, nature, heritage, adventure and lower-density development,” Siraj Ahmed, director of strategy and consulting at GCC property consultancy Cavendish Maxwell, tells EnterpriseAM. “In terms of product, there is interest in projects aligned with Oman’s natural and cultural positioning, including resort, wellness, nature-led and mixed-use developments. The market is less suited to simply replicating the high-density hospitality models seen elsewhere in the region.”

The investment pipeline reflects that approach across three primary hubs. In Muscat, a OMR 230 mn (USD 598.2 mn) integrated tourism complex in Al Qurum is being developed in phases over 15 years, including two four-star hotels and more than 400 hotel units alongside residential, retail, and recreational facilities. In Duqm, a 31 sq km waterfront master plan includes more than 2,600 hotel and hospitality units by 2040, over 3,700 residential units, and 63,000 sq m of commercial space. In Dhofar, five investment opportunities worth around OMR 1.95 bn (USD 5.07 bn) have been put forward, including the roughly OMR 1.9 bn (USD 4.94 bn) Future Salalah City.

“They have been much more active and present at international tourism exhibitions, and they have also targeted tourism professionals in the region and gathered them at B2B events inside Oman,” says Aline Ghanem, co-founder of Exclusive Services Group, a destination management company based in Beirut and Dubai. “They targeted Indian wedding planners, leisure travel professionals, and took people on tours to Jebel Akhdar, Salalah, Nizwa. They have understood their product and are engaging with the professionals that can sell it, whether as leisure, corporate, or a luxury wedding destination.”

That work has also expanded the range of target markets. “If things are calm for us in the region and if they keep their marketing strategy, Oman can become a hub for the European market,” Ghanem tells EnterpriseAM. “The authenticity of the experience appeals very much to French, Spanish, German, and Italian tourists. They also want Gulf tourists. They are going after Saudis, Emiratis, Bahrainis, and want to promote domestic travel among Omanis.”

The Nordic market shows how that strategy translates into business on the ground. Tom Egill, co-owner of Arabian Wonders and IWANNAGO, two Oman-based startups specializing in destination management and tourism services, says his company is expanding beyond its original Norwegian customer base.“We are growing very fast, and that is only with the Nordic markets,” Egill tells us. “Our Omani team helps build authentic excursions that appeal to Nordic travelers … Things you can’t pull out of a brochure like eating dinner in the traditional Omani way, visiting the homes of the Omani guides, or attending a breadmaking class.”

For those travelers, Oman occupies a different position from the Gulf’s major urban destinations. “The Nordic clients see Oman as something closer to East Africa than to the Gulf,” Egill says. That positioning gives Oman a distinct pool of international demand to develop, but scaling it requires physical access alongside marketing and product development.

Oman launched direct routes to Singapore, Sochi, and Medan in July and is pursuing additional priority markets under its National Aviation Strategy 2040. The approach is a long-cycle effort to build supply and demand together, Center for Aviation (CAPA) head of analysis Richard Maslen tells EnterpriseAM.

“I would describe it as a deliberate forward-looking strategy rather than a response to fully developed demand,” says Maslen. “Oman is building the tourism product and the air connectivity at the same time, with the expectation that each will stimulate the other.”

There is already a substantial tourism market to build on. Oman received around 1.8 mn inbound visitors in 1H 2026, broadly maintaining the previous year’s level despite regional travel disruption. Hotel demand, however, weakened during the same period: Three- to five-star hotel guest numbers fell 13% y-o-y, occupancy dropped to 8.3 percentage points to 46.3%, and hotel revenue fell 12.3%, according to NCSI figures.

By comparison, the regional picture looks weaker. Hotel occupancy declined 30.3% y-o-y in Dubai and 15.3% in Qatar during 1H 2026, compared with 15.1% in Oman and 2.7% in Saudi Arabia, according to Cavendish Maxwell data. Oman’s average daily rate increased 2.6%, while Dubai and Qatar recorded declines.

Maslen says the 2026 figures should be viewed in the context of a tourism strategy that is still being built. “The caution is that the 2026 numbers do not yet demonstrate a broad-based demand surge,” he says. “But I would not interpret that as evidence that the strategy is failing. Tourism is a long-cycle investment. Oman is trying to move from being a relatively niche destination to a much larger international tourism market, and that requires putting the capacity in place before the demand fully materializes.”

That capacity is arriving quickly. Oman added around 430 hotel keys in 1Q 2026, with another 1,200 expected by year-end, taking total supply to about 41.4k keys, according to Cavendish Maxwell. A further 2,700 keys are planned over the following two years.

“From a real estate perspective, the lower-density approach can support investment at scale, provided supply is phased in line with actual demand,” Ahmed says. “The focus on master planning, infrastructure, coordination and government-led feasibility assessment provides greater control over the timing and nature of development.”

Dhofar is where that timing is hardest to manage. More than 881k visitors arrived during the 2026 Khareef season between June 21 and August 15, with arrivals by air up 13.6%, but demand outside those weeks remains thin.

“Extending the Salalah tourism season is an important factor in strengthening the investment case for Dhofar,” Ahmed says. “The current concentration of demand around Khareef creates a degree of seasonality that needs to be addressed for hospitality and tourism assets to achieve more consistent annual performance. The broader strategy is therefore to build demand around cultural, sporting, heritage, nature and leisure activities outside the traditional peak period.”

Connectivity could help extend that season. Egill notes that a direct flight from Scandinavia to Salalah, combined with targeted marketing, could unlock another market for the southern destination. “If there were direct flights to Salalah, with the right marketing, more Scandinavians would be willing to visit because they are used to taking long flights to visit places like East Africa or the Gran Canaria,” he says.

For investors, the underlying calculation remains specific to each destination. “The investment case for large-scale tourism projects ultimately comes down to commercial fundamentals rather than the destination proposition alone,” Ahmed says. “Key considerations include the depth and seasonality of demand, accessibility, operator and brand positioning, development costs, achievable room rates, utilisation and the timing of competing supply. Muscat, Dhofar and Duqm serve different demand profiles and should not necessarily be assessed using the same assumptions.”