Q1 2016 Qatar Market Report: Hospitality Market Overview
Based on official figures released by the Qatar Tourism Authority the supply of hotel accommodation in Qatar at the beginning of 2016 reached approximately 20,700 keys between hotels and hotel apartments. This reflects a 30% increase in supply of rooms over a 12 month period, following two years of limited new supply.
In total, 15 new hotels and serviced apartment buildings opened in 2015, increasing the number of hotel and hotel apartment establishments to 119. Of the current supply, approximately 88% is categorized as either 4-Star or 5-Star.
Based on QTA 2015 Annual Tourism Performance Report, the total number of tourist arrivals reached 2.93 million. This reflected a 3.7% increase on arrivals in 2014.
Despite growing tourist arrivals, occupancy rates in the hospitality sector declined in 2015, largely as a result of the increases in supply outstripping growth in demand. This was in sharp contrast to the previous year, which saw an 8% increase in occupancy rates.
It is likely that occupancy rates in the Qatar hospitality sector will experience further pressure in the coming years, due to the pipeline of new hotels being developed throughout Doha. Based on official QTA figures, 56 hotels and 13 hotel apartment buildings, with a total of 26,653 rooms, are currently under construction and due to be released within the next five years. Of these, the QTA expect 20 hotels and hotel apartments to open in 2016. In addition, there are proposals for another 130 establishments, however in DTZ’s opinion, an oversupply of accommodation will curtail some of the proposed new development.
Room revenues have been reducing in Qatar over the past four years. This trend continued in 2015, as Average Daily Rates and Revenues per Average Room experience annual falls of 5.5% and 8.5% respectively. MDPS statistics released in March confirmed that the ADRs experienced a year on year fall of 9.6% in February, while RevPARs in February fell by 25% from the corresponding month in 2015.
In an effort to support the expanding hospitality sector, the Qatar National Tourism Sector Strategy Plan 2030 has set out a program to invest $45bn in tourism projects over the next 15 years. The aim of the program is to attract a larger amount of tourist numbers from outside GCC, with an ambitious target to increase overall annual arrivals to 7 million by 2030. To date, limited information on the proposed tourism projects has been released.
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