DTZ Quarterly Report Qatar Q2 2018: Hospitality Market Overview
DTZ’s records indicate that by the end of Q2 2018 there were 125 hotels and apartment hotels operating in Qatar. These properties provide approximately 25,350 keys, including rooms, suites and apartments. DTZ
QTA statistics indicated that there were 22,921 hotel room keys (not including hotel apartments) at the end of 2017 within 98 properties.
5-star and 4-star establishments currently dominate the market, comprising 87% of supply. The past 12 months has seen an increase in high quality mid-market hotels with the opening of the Holiday Inn, Premier Inn and Millennium Plaza, with an Ibis hotel also expected to open on C-Ring road, adjacent to the Radisson Blu.
There are currently in the region of 17,000 hotel keys and serviced apartments at various stages of planning and construction in Qatar. Tivoli Al Najada, next to Souq Wakif and The Wyndham Hotel in West Bay are expected to open shortly, adding 151 and 264 hotel rooms respectively. Al Najada will also deliver 100 apartments, while the Wyndham started to release their 252 branded apartments in Q2.
The blockade of Qatar by the Saudi-led alliance has now entered its second year. While the overall economy has remained robust, the hotel sector has continued to feel the effects of reduced visitor numbers. The GCC now accounts for 10% of overall visitors, down from approximately 50% before the blockade. Overall, visitor numbers fell by 39.5% for the first 5 months of the year, which has had a considerable impact on demand for hotel rooms.
According to statistics released by the Ministry of Development Planning and Statistics, hotel occupancy for April and May fell to 62% and 60% respectively, compared to 69% and 60% for the same months in 2017. Average Daily Rates (ADRs) for all hotels in May was QAR396, down from QAR447 in 2017. The Average Daily Rate for 5-star hotels in May fell 10% year-on-year to QAR574, which reflected a daily revenue per available room of QAR344.
The National Tourism Strategy has set out targets for 2023 to include boosting occupancy rates to 72% across the sector, and doubling tourist arrivals to 5.6 million. To help achieve these targets, QTA recently announced the expansion of visa free entry to 80 countries and the introduction of the e-visa platform.
There have also been steps to increase visitors from new markets, notably China, Turkey, Australia, Hong Kong and Russia. These initiatives will be vital for increasing demand to occupy existing hotel rooms as well as those in the development pipeline.
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