DTZ Quarterly Report Qatar Q3 2018: Hospitality Market Overview
Visitor numbers to Qatar fell by 35% in H1 2018 due to the on-going-blockade. While arrivals from other international regions has increased, a fall of 84% in GCC traffic has provided a previously unseen challenge to the hospitality sector in Qatar.
Despite the impact of the blockade, efforts to boost tourism in Qatar have been making inroads in other regions, notably in Asia, which has seen and increase of more than 350,000 visitors in the first six months of the year. This included a growth of 18% from India, one of Qatar’s principal target markets.
According to QTA the total supply of hotel keys increased to 25,828 in July 2018, an increase of 883 over the first six months of the year. This represents a 6% jump in supply. The total number of hotel and hotel apartment buildings now stands at 122.
Over the past 12 months, the opening of the Holiday Inn, Premier Inn and Millennium Plaza have increased the supply of mid-market budget hotel accommodation. However; the majority of accommodation remains focused on the luxury market, with 87% of accommodation currently available being categorized as either 4 Star of 5 Star.
The pipeline of new hotel supply remains significant, with a view to meeting targets for the FIFA 2022 World Cup. DTZ understands that there are over 16,000 hotel keys and serviced apartments at various stages of planning and construction in Qatar.
According to the QTA, hotel occupancy for the first half of 2018 was 59%, down from 61% over the same period in 2017. The overall Average Daily Rate (ADR) for the hotel sector fell from QAR 462 to QAR 398 while the overall average revenues per available room (RevPAR) fell from QAR 284 to QAR 234. Interestingly, the best performing category in H1 was the 3 Star category, which saw occupancy rates increase from 60% to 69% since the same period in 2017.
Hotel apartments continue to outperform hotel rooms, with average occupancy rates of 73% recorded for the first half of the year – a year-on-year increase of 17%. This is largely due to the more competitive rates now available on the market for long-stay guests.
Despite recent challenges, overall occupancy rates for the hospitality sector have largely defied the fall in visitor numbers to Qatar, and the increase recent in overall supply, with the main impact being reflected in average daily rates.
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