In 2009, there were just 61 hotels in the whole of Qatar. By 2013, this figure had more than doubled to 124 and a further 174 are scheduled for completion in time for the 2022 football World Cup.
This will bring the country’s total number of hotels to 298, a staggering market increase of 389% in only 13 years. Total hotel revenue has also grown from $501.1 million in 2009 to $926.7 million in 2013. By 2018, it is expected to reach $1.2 billion.
The current and projected booms in Qatar’s hospitality sector are certainly not the result of natural market forces. Funded by vast oil and gas reserves, its government has invested in a series of enormous infrastructure projects and promotional events, making Qatar more visitor-friendly and pinning it firmly on the tourism map.
This rapid development has not been without controversy. The reported deaths of hundreds of migrant construction workers has caused international outcry over working conditions.
Qatar’s authorities have already made some changes to its labour laws as a result of the condemnation, and more are in the pipeline.
Delving deeper into the gulf state’s tourism figures, the country has enjoyed a relatively steady increase in inbound tourists over recent years, rising from 1.5 million in 2009 to 2.6 million in 2013. Just over half of visitors in 2013 were from the Middle East, with 26% from Europe (a decline from the recorded 31% in 2009).
Domestic tourism also grew by 30% over the same five-year period from 409,954 to 530,686, this being partly due to a rise in disposable income among local consumers. The majority of Qatar’s international visitors are currently business people (work- related trips accounted for two thirds of total inbound tourism in 2013), but the country’s authorities are working extremely hard to change its image to a more leisure-oriented, family-friendly destination.
Whole new ballgame
The Qatar National Vision 2030 includes a strong focus on tourism infrastructure, with over $210 billion being invested to finish a number of projects before 2020. The aim is to increase tourism contribution to GDP from 1.8% (as of 2013) to 8% by 2030.
Chief among the planned developments are 12 football stadiums for the World Cup. According to the Ministry of Business and Trade, the tournament also requires a further 60,000 hotel rooms to accommodate 500,000 expected fans.
The Hamad International Airport development, with a projected annual capacity of 50 million passengers, will also make it easier than ever for tourists to reach Qatar. It is currently open for international flights, though will not be complete until 2020. Other major transport developments include a new metro system currently under construction in the capital, Doha, and a $7-billion shipping port project.
The strategy also includes the Katara Cultural village; a vast development covering a million square metres of reclaimed land between the West Bay and the Pearl-Qatar (an artificial island off the country’s east coast). Inaugurated in 2010, Katara hosts galleries, an opera-house, cinema and amphitheatre, as well as a 1.5km beach and top-quality international restaurants. Last year, Qatar also hosted the Eid al-Adha Festival, which attracted a reported 250,000 people.
Qatar’s hotel industry is currently dominated by Katara Hospitality, previously Qatar National Hotels, which in 2013 had 16 hospitality properties in the country.
Going global
Starwood plans to open a Westin hotel in Doha in 2015 – containing 365 standard and 92 executive rooms – in addition to the three properties it already has in the capital: the St Regis Doha, the Sheraton Doha Resort and Convention Hotel and W Doha Hotel and Residences. A Hilton Panorama Residence at the Pearl-Qatar’s Abraj Quartier precinct, with 445 serviced hotel apartments and costing $390 million, is also being built and Accor will open the Pullman Doha West Bay and the MGallery Doha Msherieb by 2015, focusing on the corporate and MICE market.
Thai connection
Smaller international operators are also piling into Qatar. Thailand-based Anantara Hotels opened a 141-room resort on Banana Island close to the new Hamad International Airport in April this year. Another Thai firm, Centara Hotels and Resorts, is planning a new five-star hotel, with 264 rooms and 96 residences in West Bay, that is expected to open in 2016.
Qatari firm Alfardan Hospitality, in partnership with Kempinski Hotels, will open the five-star waterfront Marsa Malaz Kempinski in the last quarter of 2014.
Qatar’s hotel sector has enjoyed a steady increase in revenue between 2009 and 2013, with a compound annual growth rate (CAGR) of 16.61%. Room occupancy rates also improved over the same period, rising from 59% to 64%, though revpar fell by 3.1%.
It is expected that Qatar’s hotel revenue growth will continue to expand over the years to come, with a predicted CAGR of 5.74% from 2014-2018. The number of inbound tourists is also forecast to rise to 3.7 million by 2018, with a concurrent increase in average expenditure to $1,481 by 2018.
Looking ahead
With the arrival of so many major firms, along with the backing of a rich and relatively unfettered state, it seems likely Qatar’s projected growth will take place as forecast.
The only potential pitfall seems to be the country’s dismal human rights record, which could well deter international visitors.
The government has already promised to reform the controversial labour laws that form a large part of this problem. Whether or not it does so could decide the long-term future of Qatar’s hospitality sector.
To purchase the full report, contact marketing@timetric.com.
