DTZ Quarterly Report Qatar Q1 2019: Hospitality Market Overview
Tourist arrivals into Qatar decreased by 19% in 2018 compared to 2017 as per the latest official statistics released by the National Tourism Council (NTC); however, despite the fall in tourist numbers, demand for hotel rooms increased in 2018.
According to the NTC’s annual report for 2018 the total number of available rooms in December 2018 was 25,917, contained in 124 hotel and hotel apartment establishments. DTZ research shows that this number has increased by almost 700 rooms in Q1 with the opening of The Mandarin Oriental and M Gallery in Msheireb, as well as VIP Hotel on C-Ring Road.
Luxury accommodation still dominates the market with more than 85% of overall supply currently categorized as either 4-Star or 5-Star. According to NTC’s estimates, approximately 23,000 hotel keys at various stages of planning and construction to be completed prior to the 2022 FIFA World Cup.
Hotel revenues have been affected by the overall increase in supply, reflecting increasing competition between hotels to secure overnight guests. The overall Average Daily Rate (ADRs) dropped to QAR 380 for 2018. According to the Ministry of Development Planning and Statistics, the overall average ADR in February was QAR 368, which reflected a 6% fall in 12 months and an 20% fall over two years.
Despite the fall in tourist numbers, occupancy rates in hotels have remained stable. According to the NTC, the overall occupancy rate for 2018 was 61%, which is a 3% increase on 2017’s figure. DTZ understands that there has been a significant increase in domestic tourism (‘staycations’), especially in 5-Star establishments, while overnight stays for regional business travelers have increased since the introduction of the blockade. Overall occupancy rates have also been boosted by the popularity of hotel apartments with long-stay guests / full time residents.
The NTC has introduced several measures to counteract the fall in tourist arrivals since 2016 and to boost the hotel sector, including the introduction of e-visas, free 96-hour transit visas, and visa free arrivals for more than 80 countries. As a result, there has been an increase in arrivals from Russia and China (top two countries in terms of growth since 2013) where NTC opened representative offices in 2018, with India boasting the highest absolute increase. Consequently, Qatar now ranks as the most open country in the Middle East and the 8th most open country in the world according to the World Tourism Organization (UNWTO) visa openness rankings.
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