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20 August 2018 05:57 am

Qatar’s hospitality market growth to top QR5bn by 2022

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Qatar’s hospitality market is expected to maintain growth and total QR5.1bn ($1.4bn) by 2022, a new study by Alpen Capital shows.

This translates into a compound annual growth rate (CAGR) of 12.1% in five years up to 2022, Alpen Capital noted.

Qatar’s hotel sector is dominated (70%) by 4-star and 5-star hotels, the study shows.

International tourist visits in Qatar are expected to grow at a five-year CAGR of 5% to 2.9mn whereas the hotel supply is expected to grow at a five-year CAGR of 12.8% to 46,000 hotel rooms. 

Average daily rate (ADR) is expected to grow at a five-year CAGR of 0.5% to $164 until 2022, whereas the revenue per available room (RevPAR) is expected to decline at a 5-year CAGR of 0.4% to $91 by 2022. 

In 2017, Qatar witnessed a decline in international tourist arrivals, particularly GCC tourists on account of the blockade on the country by some Arab neighbours.

However, Alpen Capital noted “Qatar is considering it as an opportunity to become self-reliant, and also preparing to host FIFA World Cup 2022.”

Qatar is required to have 60,000 hotel rooms by 2022 as per FIFA guidelines. Qatar National Tourism Sector Strategy 2030, targets 5.6mn international tourist arrivals by 2023. 

To attract tourists, it has introduced new measures such as visa-free entry for citizens of 80 countries.

GCC hospitality market is projected to reach $32.5bn in 2022 from an estimated $22.9bn in 2017, implying a five-year CAGR of 7.2% on the back of upcoming major events including World Expo 2020, FIFA World Cup 2022 in Qatar and new leisure attractions.

“These events command a significant supply of hotel rooms to meet the anticipated demand. GCC has a number of infrastructure and hotel projects scheduled to open through 2022 to accommodate the future tourist inflow,” the study said. 

In addition to events, the leisure attractions continue to be a major demand driver for the GCC hospitality industry with more than 2,000 projects worth $200bn in the pipeline, it said.

GCC MICE (Meetings, incentives, conferences, and exhibitions, or Meetings, Incentives, Conferences, and Events) market is expected to also play its role in attracting visitors for its conferences and events.

“The GCC countries are expected to witness an improvement in economic performance on account of recovery in oil prices leading to improved sentiment and increase in government spending,” Alpen Capital said. 

GCC countries have well-defined strategies to develop themselves as preferred travel destinations, it said.

They are making significant investments into the development of tourism and hospitality infrastructure including airport expansions to increase the handling capacity of anticipated visitor inflow. This is supported by regional air carriers offering attractive offers and discounts along with exclusive memberships in order to boost tourism activity in the region.

“But after the planned events (post-2022), there would be concerns of oversupply unless there is some visibility on future initiatives by GCC governments to maintain the momentum,” Alpen Capital noted. 

Between 2017 and 2022, GCC hotel supply is expected to grow at a CAGR of 4.01% to approximately 835,723 rooms, including serviced apartment rooms.

Across the GCC region, “the ADR and RevPAR may come under pressure in the short term due to demand supply mismatch in the market and stiff competition from the mid-market hotel segment and the Airbnb renting model.” 

However, in the long term the industry is expected to perform well on account of significant international tourist arrivals for these events, Alpen Capital said.

Source: https://www.gulf-times.com/sto...

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