Growing demand to support Qatar hospitality sector in long term
August 24 2016 09:59 PM
Qatar
The hospitality industry in Qatar is gearing up for expansion in view of mega events such as FIFA World Cup 2022.

The Qatari hospitality sector revenue, which is slated to grow annually at 12.9% to $1.6bn during 2015-20, may see its key operating metrics remain under pressure in the short term but likely to rebound in the long term supported by the growing demand, according to Alpen Capital.

Forecasting that Qatar's sector revenue is expected to expand from an estimated $0.9bn in 2015, Alpen Capital said the growth will be the fastest in the region primarily credited to the rapid hospitality property developments in the build-up to the mega football event in 2022.
Room supply is expected to grow at a compound annual growth rate (CAGR) of 12.5% from 2015 to 2020, representing an addition of nearly 17,000 keys, it said, adding during the same period, international tourist arrivals are anticipated to rise at an annual average of 7%.
Highlighting that a faster increase in supply than demand is likely to maintain pressure on occupancy rates in hotels and serviced apartments, Alpen Capital said the key operating metrics of the sector is expected to remain under pressure in the short term, mainly in the UAE and Qatar, but is likely to rebound in the long term supported by growing demand.
Projecting that overall occupancy rates are set to decline by 7.5 ppts (percentage points) during 2015-20, the report said the decline is expected to be steeper in 2016 and then drop moderately in years to 2020.
ADRs (average daily rates) in the country’s hotels and serviced apartments are also likely to decline in the early years of the forecast period, according to it.
"However, we expect room rates to improve in the subsequent years to 2020 registering an overall 1.1% annualised growth during 2015-20. Consequently, combined RevPAR (revenue per available room) of hotels and serviced apartments is likely to be $125 in 2020, lower than $133 in 2015," it said.
The hospitality industry in the UAE and Qatar is gearing up for expansion in view of the mega events such as FIFA World Cup 2022. In the run-up to the World Cup, Qatar also has a strong pipeline of hotel projects with the country estimated to reach a capacity of 46,000 rooms by 2022, which is short of the 60,000 rooms mandated by FIFA, the international governing body of football.
Nevertheless, contingency plans are being laid down to accommodate tourists in Bedouin-style desert camps and cruise ships.
The top hospitality projects underway in the country include Silver Pearl Hotel (1,000 rooms), JW Marriott Hotel Doha (412 rooms), Centara Grand West Bay Hotel (360 rooms), Le Meridien (350 rooms), and Planet Hollywood Hotel (300 rooms).
Asserting that Qatar has substantial scope for developing mid-scale hotel properties to add to its list of existing ones that are predominantly upscale and five-star hotels, Alpen Capital said development of mid-scale hotels, which are faster and economical to build, will help the country to add more rooms prior to its mega sport event.
In February 2014, Qatar had launched its National Tourism Sector Strategy 2030 to fortify the country’s standing as a world-class tourism hub. The strategy encompasses policies, plans, programmes, and projects designed to advance the tourism sector.
The key targets of the strategy include driving tourist traffic up to 7mn visitors annually, adding up to 62,000 rooms, creating 127,000 jobs, and doubling-up non-GCC (Gulf Cooperation Council) arrivals to 64% by 2030. To offer more accommodation facilities and increase tourism, the Qatari government is also redeveloping its Doha Port to transform it into full-time cruise terminal.
The Hamad International Airport, which opened in 2014, is also on an expansion spree. It plans to double the size of its main terminal by 2020.

Last updated: August 24 2016 10:39 PM


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