Opportunities and challenges facing Qatar in 2016

The Qatar Hospitality Summit 2016 got underway with a statistical analysis of the hospitality landscape by TRI Consulting associate director Christopher Hewett.

As Qatar progresses in its vision to diversify the economy away from oil dependency, hoteliers can expect to see a range of opportunities and challenges in the coming years, according to Hewett.

At present the hospitality sector is responsible for contributing US $13.6billion to GDP, coming from 20,713 hotel rooms and apartments, enjoying 11.5% average annual growth between 2010 and 2015.

“Optimistically, there is growing infrastructure investment too from the Qatari government,” says Hewett.

However, potential challenges face existing hoteliers in Qatar, including the growing competition from 48 new hotels expected in the coming 12 to 18 months ahead, with 12,200 rooms currently under construction.

Qatar currently has 18,975 existing hotel rooms, with 20 new properties that opened in 2015.

“New sub-markets are being created too, especially the rise of mid-market hotels, giving the consumer greater choice in the market,” says Hewett.

“Furthermore, every destination is seeing a drop in demand, occasionally a significant drop in demand is being experienced in some countries across this region,” he added.

Qatar however has maintained growth, welcoming 2.93 million visitor in 2015, representing a 3.7% growth over 2014, according to Hewett.

“It is important for hoteliers to note that 44% of visitors in 2015 came from GCCs, with 900,000 coming from Saudi Arabia,” he noted in reference to growing occupancy levels.

The latest statistics also indicate that the three-star market in Qatar saw consistent increases in ADR performance in 2013, 2014 and 2015.

The longer term market outlook for Qatar hospitality is expected to see continued challenges arising from lower oil prices, which will impact the sector in 2016 and into 2017.