However, no new supply was introduced into the Doha market in the third quarter (Q3) of this year, market consultant Colliers International said in its quarterly report on Doha’s hotel market.
While significant supply is expected to enter the five-star and four-star segments over the next few years, delays are typically expected in Doha, which leaves more time for the market to absorb the new supply, it said. Branded supply is expected to increase by a compound annual growth rate (CAGR) of 19% from 2016 to 2018, Colliers International said.
Due to a drop in oil prices and slowing economic activity, hotels experienced a decline in demand. The hotel market occupancy is forecasted to close at 66% this year, which Colliers International said, is still higher than the occupancy rate in some GCC cities that are also heavily reliant on the corporate segment.
Serviced apartments have experienced relatively stable performance levels and seen stronger resilience during tough times when compared to hotels.
The serviced apartments’ concept continues to evolve and appeal to a wider target audience. Its strong resilience and limited presence in the market will appeal to hospitality developers and investors.
In its ‘District focus’ Colliers International said Doha Downtown is home to several key demand generators including the Corniche, Souq Waqif, Qatar National Museum and Msherib Downtown. The latter is currently undergoing a QR20mn regeneration project to add retail, residential, museums and hotels to the area.
In addition, the upcoming Doha metro, which is expected to be completed by 2020, will host several stations in the Downtown area.
The market (Doha Downtown) currently is dominated by five-star hotels, the report showed. The announced future hotel supply contains a significant share of four-star hotels, amounting to 48% of the total pipeline, followed by the five-star segment with a share of 44%.
Due to the economic slowdown, hotel projects in Doha have been delayed. This also had an effect on the timely delivery for current construction works in Doha Downtown, where 18% of future hotel supply has already seen a delay of approximately two years.
According to Colliers International The Msherib project is expected to have a positive impact on the downtown area, including a potential diversification of the client base.
The report also stated that the Doha metro is expected to facilitate easy access to laces of interest such as Souq Waqif, the Corniche and the Qatar National Museum, increasing footfall significantly.