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    Audit.Tax.Consulting.Financial Advisory.

    Oman Hotel Information

    Research by Ministry of Tourism in Oman and

    June 2008

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    Table of Contents

    1 Existing Hotels - Their Classes

    2 Existing Hotels - Their Guests

    3

    4

    Existing Hotel Guests - Their Stay Patterns

    Tourism - A Key Factor Driving Hotel Growth

    5 Proforma Future Hotel Requirements Analysis at

    31 March 2008

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    1. Existing Hotels Their

    ClassesHotels by class

    5 star by region

    4 star by region

    D 3 star by region

    2 star by region

    Other hotels by region

    A

    B

    C

    F

    E

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    5 star hotels, though low in number

    (12) account for 26% of rooms in theSultanate

    Almost 55% of hotels are either 1star or unclassified; they account for25% of the hotel rooms

    Hotels by class

    32 (17%)

    22 (12%)

    17 (9%)

    12 (7%)

    101 (55%)

    Hotel rooms by class in Oman

    1,367 (15%)

    1,221 (14%)

    2,348 (26%)

    1,812 (20%)

    2,295 (25%)

    5 Star

    4 Star

    3 Star

    2 Star

    Other

    Source: Research by Deloitte 2008

    2

    A. Hotels By Class

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    Muscat home to almost 79% of 5 star hotel rooms in Oman

    Next highest is Dhofar followed by Al Batina and Musundam

    5 star hotel rooms by region

    79%

    3%

    13%

    5%Muscat

    Al Batina

    Dhofar

    Musandam

    Source: Research by Deloitte 2008

    B. 5 Star By Region

    3

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    Highest concentration of 4 star hotel rooms in Muscat

    More or less equal distribution of 4 star hotel rooms among other regions Al Batina,Dhofar, Musundam and Al Dakhliya

    4 star hotel rooms by region

    8%

    7%

    6%

    72%

    7%

    Muscat

    Al Batina

    Dhofar

    Musandam

    Al Dakhliya

    Source: Research by Deloitte 2008

    C. 4 Star By Region

    4

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    Muscat home to highest proportion (40%) of 3 star hotel rooms

    Other important regions offering 3 star experiences include Dhofar, Al Sharqiya and AlDhahira

    3 star hotel rooms by region

    2%26%

    4%

    40%

    11%

    17%

    Muscat

    Al Batina

    Dhofar

    Al Dakhliya

    Al Dhahira

    Al Sharqiya

    Source: Research by Deloitte 2008

    D. 3 Star By Region

    5

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    Concentration of 2 star hotel rooms highest (44%) in Muscat

    Dhofar home to next highest proportion (27%) of 2 star hotel rooms

    2 star hotel rooms by region

    27%

    2%

    12%

    44%

    10%

    5%

    Muscat

    Dhofar

    Musandam

    Al Dakhliya

    Al Dhahira

    Al Sharqiya

    Source: Research by Deloitte 2008

    E. 2 Star By Region

    6

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    Muscat hosts a high proportion (41%) of other hotels 1 star and unclassified

    Important regions home to other hotels include Dhofar, Al Dhahira and Al Sharqiya,among other regions

    Other hotel rooms by region

    7%14%

    1%

    41%

    2%

    12%

    16%

    7%

    Muscat

    Al BatinaDhofar

    Musandam

    Al Dakhliya

    Al Dhahira

    Al Sharqiya

    Al Wusta

    Source: Research by Deloitte 2008

    F. Other Hotels By Region

    7

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    2. Existing Hotels Their

    GuestsSource markets for 5 star hotels

    Source markets for 4 star hotels

    Source markets for 3 star hotels

    D Source markets for 2 star hotels

    Source markets for other hotels

    A

    B

    C

    E

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    5 Star Hotels continue to entertain guests from GCC and Europe

    Guests from Oman and other regions (Americas and Ocaenia included) are growingsegments

    Source markets for 5 star hotels

    0

    50,000

    100,000

    150,000

    200,000

    250,000

    300,000

    Omani GCC Other Arabs Europeans Asians Others

    Numberofgues

    ts

    2002 2003 2004 2005

    Source: Research by Ministry of Tourism in Oman

    A. 5 Star Key Source Markets

    9

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    4 Star Hotels receive guests from most source markets

    European and Asian guests have increased over the years

    Source markets for 4 star hotels

    0

    20,000

    40,000

    60,000

    80,000

    100,000

    120,000

    Omani GCC Other Arabs Europeans Asians Other

    Numberofgue

    sts

    2002 2003 2004 2005

    Source: Research by Ministry of Tourism in Oman

    B. 4 Star Key Source Markets

    10

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    3 Stars fueled by strong local demand

    Oman, Europe and Asia are key source markets for 3 Star Hotels

    Source markets for 3 star hotels

    0

    5,000

    10,000

    15,000

    20,000

    25,00030,000

    35,000

    40,000

    45,000

    Omani GCC Other Arabs Europeans Asians Other

    Numberofgue

    sts

    2002 2003 2004 2005

    Source: Research by Ministry of Tourism in Oman

    C. 3 Star Key Source Markets

    11

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    Surge in Omani guests for 2 Star Hotels over 2002- 2005

    GCC, Europe and Asia are other important growing segments

    Source markets for 2 star hotels

    0

    5,000

    10,000

    15,000

    20,000

    25,000

    30,000

    35,000

    40,000

    Omani GCC Other Arabs Europeans Asians Other

    Numberofguests

    2002 2003 2004 2005

    Source: Research by Ministry of Tourism in Oman

    D. 2 Star Key Source Markets

    12

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    Large proportion of guests are Omani in other hotels

    Significant usage of other hotels by guests from GCC, Europe and Asia

    Source markets for other hotels

    0

    20,000

    40,000

    60,000

    80,000

    100,000

    120,000

    140,000

    160,000

    Omani GCC Other Arabs Europeans Asians Other

    Numberofgue

    sts

    2002 2003 2004 2005

    Source: Research by Ministry of Tourism in Oman

    E. Other Hotels Key Source Markets

    13

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    3. Existing Hotel Guests

    Their Stay PatternsOmani guests

    GCC guests

    Guests from other Arabic countries

    D European guests

    Asian guests

    Other guests

    A

    B

    C

    F

    E

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    More Omani guests stay in other hotels (1 star or unclassified)

    Pattern of stay - Omani guests

    0

    20,000

    40,000

    60,000

    80,000

    100,000

    120,000

    140,000

    160,000

    2002 2003 2004 2005

    Numberofguests

    5 star 4 Star 3 Star 2 Star Other

    Source: Research by Ministry of Tourism in Oman

    A. Pattern of Stay Omani Guests

    15

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    Growing stay patterns in 5 star hotels and other hotels

    Pattern of stay - GCC guests

    0

    20,000

    40,000

    60,000

    80,000

    100,000

    120,000

    2002 2003 2004 2005

    Numberofguests

    5 star 4 Star 3 Star 2 Star Other

    Source: Research by Ministry of Tourism in Oman

    B. Pattern of Stay GCC Guests

    16

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    Stay in 4 star hotels highest among other hotel classes over 2002-05

    Pattern of stay - Guests from other Arabic countries

    0

    5,000

    10,000

    15,000

    20,000

    25,000

    30,000

    2002 2003 2004 2005

    Numberofg

    uests

    5 star 4 Star 3 Star 2 Star Other

    Source: Research by Ministry of Tourism in Oman

    C. Pattern of Stay Guests from other Arabic countries

    17

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    Europeans prefer 5 and 4 star hotels over the others

    European guests in 5 star hotels have grown two-fold during the period 2002-05

    Pattern of stay - European guests

    0

    50,000

    100,000

    150,000

    200,000

    250,000

    300,000

    2002 2003 2004 2005

    Numberofguests

    5 star 4 Star 3 Star 2 Star Other

    Source: Research by Ministry of Tourism in Oman

    D. Pattern of Stay European Guests

    18

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    Asian guests stay primarily in 4 star and other hotels

    Asian guests in 4 star hotels have increased by 1.5 times over 2002-05

    Pattern of stay - Asian guests

    010,000

    20,000

    30,000

    40,000

    50,000

    60,000

    70,000

    80,000

    90,000

    100,000

    2002 2003 2004 2005

    Numberofgu

    ests

    5 star 4 Star 3 Star 2 Star Other

    Source: Research by Ministry of Tourism in Oman

    E. Pattern of Stay Asian Guests

    19

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    This segment includes guests from Americas and Oceania

    Their stay in 5 and 4 star hotels have been growing

    Pattern of stay - Other guests

    0

    20,000

    40,000

    60,000

    80,000

    100,000

    120,000

    2002 2003 2004 2005

    Numberofguests

    5 star 4 Star 3 Star 2 Star Other

    Source: Research by Ministry of Tourism in Oman

    F. Pattern of Stay Other Guests

    20

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    Tourism in Oman experiencing rising trends over the years

    Number of international guests visiting Oman stood at over 1.6 million in 2006

    Total guests to Oman

    0

    200,000

    400,000

    600,000

    800,000

    1,000,000

    1,200,000

    1,400,000

    1,600,000

    1,800,000

    1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

    Numberofgues

    ts

    Source: Research by Ministry of Tourism in Oman

    A. Tourism in Oman

    22

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    Arab world continues to rank as key source market for tourism in Oman

    Europe and Asia are other emerging source markets

    International guests to Oman

    0

    100,000

    200,000

    300,000

    400,000

    500,000

    600,000

    700,000

    Arab

    Countries

    Africa Asia America Europe Oceania

    Numberofgu

    ests

    2002 2003 2004 2005 2006

    Source: Research by Ministry of Tourism in Oman

    B. Tourism in Oman Key Source Markets

    23

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    Almost 16,000 rooms expected to be developed through Integrated Tourist Complexes

    Muscat will be home to about 51% of these additional rooms

    C. Planned Expansion through Integrated Tourist Complexes

    24

    Planned expansion of hotel rooms through Integrated Tourism Complexes

    -

    500

    1,000

    1,500

    2,0002,500

    3,000

    3,500

    4,000

    2008 2009 2010 2011 2012 2013 2014 2015

    Numberofro

    oms

    Muscat Dhofar Al Batinah Other

    Source: Ministry of Tourism in Oman

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    WTTC forecasts Omans Travel & Tourism Economy GDP to reach OMR 2,265 million by2018, contributing to 11.1% of National Accounts

    Travel & Tourism Economy of Oman

    -

    500

    1,000

    1,500

    2,000

    2,500

    2003 2004 2005 2006 2007(E) 2008 (F) 2018 (F)

    OMRmillion

    8.00

    8.50

    9.00

    9.50

    10.00

    10.50

    11.00

    11.50

    %o

    fNational

    Accounts

    Travel & Tourism Economy GDP % of National Accounts

    E - Estimate; F - Forecast Source: World Travel & Tourism Council

    D. Future Outlook Travel & Tourism Economy

    25

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    WTTC forecasts Omans Travel & Tourism demand would witness 5% real growth(annualized) over the years 2009-18

    Oman vs. neighbors

    5.9

    5.6

    5.0

    4.7

    4.7

    4.6

    4.1

    3.2

    3.2

    2.4

    0 1 2 3 4 5 6 7

    Bahrain

    Qatar

    Oman

    Kuwait

    United Arab Emirates

    Syria

    Jordan

    Saudi Arabia

    Lebanon

    Yemen

    10 year (2009-18) Real Growth Annualized (%)

    Source: World Travel & Tourism Council

    E. Future Outlook Oman vs. Neighbors

    26

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    5. Proforma Future HotelRequirements Analysis at

    31 March 2008Muscat Analysis

    Al Batinah Analysis

    A

    B

    Dhofar AnalysisC

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    28

    MUSCAT ANALYSIS

    Recommendations:

    Licensing should be continued for:

    3*, 2* and 1* hotels and apartments.

    Small hotels and hotel apartments of 4* and

    5* (100 rooms and less)

    Assumptions:50 room per 1 star approval granted;75 room per 2 star approval granted;100 room per 3 star approval granted;

    granted150 room per 4 star approvalAttrition rate of 40%

    2,4001,61375515,00014,2459,0236,015-15,038-5,222TOTAL

    3,3001,3101,96528%4,2002,2357354908%1,22529%1,5002 Star