DOHA: Qatar will be one of the fastest growing markets in the GCC Hospitality sector in terms of number of hotel rooms, trends, challenges and over all outlook of the industry over the next five years. The sector is expected to grow with a CAGR of 13 percent, says a report prepared by Alpen Capital.
“Qatar is an important business hub in the GCC region. The hospitality market in the country is expected to grow at a CAGR of 13.6 percent as strong macro-economic conditions continue to drive the demand for hotels. Tourist arrivals in Qatar are expected to rise at a CAGR of 1.9 percent, between 2012 and 2022. The Qatar government is planning to incur $65bn in infrastructure spending to facilitate tourist movement during the 2022 FIFA World Cup. These drivers are likely to aid travel arrivals, going forward”, said the report.
Qatar’s successful bid to host the 2022 FIFA World Cup is likely to provide a major boost to tourism activities in the region. Over the next ten years, the country is expected to see significant additions to its room supply pipeline. The Qatar government has allocated $20bn for the development of tourism projects which include hotels, parks and other entertainment avenues.
In addition, the country is expected to spend an additional $4bn for constructing nine stadiums, renovating three stadiums and equipping all stadiums with cooling systems. As per Hotelier Middle East’s data, currently there are 17 new hotel properties either in the planning or construction stage. Post the announcement of the 2022 FIFA World Cup, major international hotel players are planning their hotel projects in the country. Thus, hotel room capacity in Qatar is expected to grow at a CAGR of 9.1 percent over the next five years.
Hotel room demand is expected to rise strongly as corporates from across the world explore various business possibilities with Qatar as the country readies itself for the FIFA world cup. This is likely to boost occupancy rates from 59 percent in 2011 to 66.8 percent in 2016. Strong corporate demand for hotels is likely to help ADRs rise at a CAGR of 1.6 percent from $231 in 2011 to $249.7 in 2016.
“The GCC hospitality sector, especially Qatar is poised for a healthy growth owing to factors such as favourable economic conditions combined with infrastructure development, increased bids to host high profile global events and government support to the private sector. All these factors have contributed to the steady increase in tourist arrivals which in turn has facilitated the growth of the hospitality industry in the region, said Sameena Ahmad at Alpen Capital.
The report estimates that the GCC hospitality market is anticipated to grow at an annual rate of 8.1 percent to $28.3bn by 2016 compared to $19.2bn in 2011. Demand for hotels is also likely to be driven by higher arrivals from Asian nations as travel spend is likely to grow at an impressive rate driven by rising income levels.
“The GCC hospitality industry has been high on the investment radar of businesses given the macroeconomic trends and the rise in business/ leisure visitors to the region. The industry has strong fundamentals and is beginning to realize its potential. Accordingly, we believe that the industry presents itself as an excellent opportunity for all stakeholders”, said Sanjay Bhatia at Alpen Capital.
The Peninsula
