Market Update 2016: Doha

Doha’s hospitality industry is not experiencing its busiest season. As per official figures from the tourism authority, visitor numbers were down 6% in the first half of 2016 YTD as the country welcomed 1.4 million visitors in the first six months of the year.

Hoteliers and industry stakeholders are concerned over falling room rates and occupancy levels. Operators say that the five-star and luxury segment has borne the brunt with travellers turning more towards four- and three-star accommodation. This is partly due to companies reducing their spending on corporate and business trips for their employees.

In 2015, Qatar tourism enjoyed a slight growth YoY. The Annual Tourism Report for 2015 by the Qatar Tourism Authority (QTA) stated that the country’s tourism sector “had emerged strong” at the end of last year, marking a 3.7% growth from the previous year with 2.93 million visitors coming to Qatar.

However, in the report, QTA admits that it had to rework its estimated target of three million visitors, after a dip in arrivals through Q4 2015. Some 2,929,630 tourists visited Qatar in 2015, as the country fell just short of its estimated goal.

At the beginning of 2015, QTA stated there were 22,484 rooms under construction across 56 hotels under construction. A further 4,168 hotel apartments would also be ready to come to the market in the subsequent years.
Room supply and demand.

At the end of 2015 the total number of available keys in Qatar rose by 30% to 20,713 rooms as versus 15,879 at the end of 2014. Meliá Doha opened in February 2015, and its general manager Sherief Abouelmagd tells Hotelier Qatar: “In 2016, there were an additional 27% rooms in the market and I started the year with three hotels opening around me in the immediate area – Rotana, Shangri-La and Hyatt Residence. You see in front of me the Waldorf Astoria and just behind this hotel the JW Marriott is coming up, but these are at least one to two years away.

Abouelmagd is referring to the supply in the West Bay district of Doha, which is the focus of many international operators with Thai-based Centara Hotels and Resorts set to open its first Middle East property there in Q4 2016.

Abouelmagd adds: “Basically, you have supply outpacing demand. Besides the drop in business in Doha, there is a struggle at the moment and all the hotels are fighting against each other in the market.”

TRI Consulting associate director Christopher Hewett tells Hotelier Qatar: “Hoteliers in Doha are certainly experiencing a challenging environment with revenues and profits falling. With a strong pipeline of new hotels, particularly in and around West Bay, we expect heavy competition to continue in the area for the foreseeable future.”

Read the full article here.