Comment: Qatar hospitality is more than football
Qatar is currently synonymous with the 2022 FIFA World Cup, and asking hoteliers to comment on the impact of a potential loss of the event in the midst of the current scandal, certainly hits a nerve. Many refuse to express their opinions, while those who have spoken out have said that whether Qatar keeps or loses the World Cup, this will not impact hotel development or performance, since management agreements are signed on sturdier foundations than a four-week football tournament.
However, there’s no doubt that hosting an international event on the scale of the FIFA World Cup would provide unprecedented publicity for the Gulf state, which is the first Arab country ever to have been given the rights to host it.
During the four-week event, one million visitors are expected to go to Qatar, and Qatar Tourism Authority (QTA) has already earmarked US $17 billion for tourism-related infrastructure projects, specifically to support this.
An estimated 60,000 rooms are needed by FIFA for the showpiece, and the country’s current 15,879-key inventory is ramping up fast. According to STR Global’s May pipeline data, Qatar has 6383 rooms in 26 hotels under development currently.
According to a report by professional services network PricewaterhouseCoopers (PwC), supply will increase in 2015 by around 25%, which far outstrips demand growth, and this trend is expected to continue over the next three to four years.
International operators have robust pipelines for the country. AccorHotels has three hotels under development in Qatar, including the 468-key Pullman; Rotana has Centro Doha and City Centre Rotana under construction; Starwood is developing the Méridien and the Westin, Marriott will soon operate the 412-key JW Marriott.
Hilton has the largest Qatar pipeline of all, with eight hotels coming up, including the 445-key Hilton Doha the Pearl Residence.
Commenting on the potential impact on hotel performance of Qatar losing the tournament, Rudi Jagersbacher, president, MEA for Hilton Worldwide said: “Whilst major events are definitely tourism milestones, our growth strategy is framed by a long-term view on local market dynamics and trends.
"We are confident that our pipeline of eight properties — including the soon-to-open DoubleTree by Hilton Doha Old Town and Hilton Salwa Beach Resort — are well positioned for the increasing number of guests, who are eager to visit Qatar.”
While operators are not necessarily relying on the World Cup to fill rooms, it can’t be denied that the event would provide a fantastic opportunity, and losing it would therefore be a real blow.
Jagersbacher certainly has a point however; Qatar hasn’t put all of its eggs in one basket.
Already the country is performing very well as a MICE and stopover destination, and the new Airport Hotel is reportedly achieving 100% occupancy daily, having been open for just one year.
PwC has forecast positive growth for Qatar this year, having seen it outperform expectations in quarter one.
While in 2014, average occupancy was 73.8%, PwC is predicting it to reach 77.9% this year and 80.7% next year.
Average daily rate growth is predicted this year too for the first time in six years, albeit attributed in part to a slow-down in supply.
Aside from the World Cup, Qatar Tourism Authority’s National Tourism Sector Strategy Vision 2030, launched last year (inline with the country's overall Vision 2030, which is a development plan for the peninsular country) will see $200 billion investment in infrastructure. Some of the projects are the new airport and the Mall of Qatar, as well as the $1.8 billion Doha Festival City, which includes an Angry Birds theme park.
And so amidst the FIFA scandal, I think it’s important to keep in mind that Qatar’s tourism potential goes beyond 2022. While losing the event would in the short-term be a real misfortune — and hopefully it will not come to that — there are plenty of other visitor-boosting opportunities coming up in the near future for Qatar-based hoteliers to leverage.