Quarterly Report Qatar Q2 2024: Hospitality Market Overview

Qatar announced its largest tourism project to date, to be developed in Simaisma

The National Tourism Council’s latest statistics report reflected a buoyant tourism and hotel sector in Q1 2024. Tourist arrivals to Qatar surpassed 1.6 million in the first three months of the year, a 40% increase on 2023. This created a demand for room nights in hotels of 2.6 million, up 37% on the previous year.

Saudi Arabia is Qatar’s largest source market for visitors for Qatar with 28% of overall visitors coming from the neighbouring Kingdom. India represents the second biggest market at 7%, while the third highest number of visitors in Q1 2024 came from Germany (5%).

The increase in visitors has boosted the performance metrics for the hotel real estate sector with occupancy up from 54% in Q1 2023 to 75% this year. Monthly occupancy peaked at 85% in February, coinciding with Qatar hosting the Asian Cup and Web Summit.

The increase in demand also boosted hotel revenues in Q1 with ADR’s up 10% y/y to QAR 481 and RevPARs up 53% to QAR 361. According to statistics released by the Planning and Statistics Authority (PSA) in April, overall occupancy was 63% while ADRs were QAR 463, up from 47% and QAR 442 in April 2023 respectively.

While overall occupancy rates and ADR’s have performed relatively well this year to date, several hotels have struggled to gain traction in an increasingly competitive market, with occupancy rates below 30%. The prevailing market conditions have resulted in a reluctance from investors to support new hotel development, which has reduced the pipeline of future supply in Doha.

By April the overall supply of hotel key in Qatar reached 39,715, of which approximately 10,000 were hotel apartments. Approximately 90% of hotel rooms in Qatar are classed as four star of five-star, with the majority of apartments being classed as ‘deluxe’. While the pace of new supply has slowed over the past year, the total number of rooms reflects an increase of more than 45% in five years, putting pressure on hotel occupancies and the performance of hotel restaurants over a sustained period.

In June, the Prime Minister and Minister of Foreign Affairs HE Sheikh Mohammed bin Abdulrahman bin Jassim Al Thani launched the Simaisma Project. The project, led by Qatari Diar aims represents the most significant tourism project in Qatar to date. It aims to establish an internationally recognized tourist destination and forms part of Qatar’s ambitious Nationa Development Strategy 2024-2030, which seeks to diversify economic growth. It will feature 16 resort hotels, a theme park, an international standard golf club, a yacht club and marina and significant retail and restaurants provisions.

Cushman & Wakefield Quarterly Report Qatar Q2 2024

To buy, list, or lease properties in Doha, please click here