Q4 2015 Qatar Market Report: Hospitality Market Overview
Hospitality Market Overview
Based on DTZ’s analysis, by December 2015 the supply of hotel accommodation in Qatar reached approximately 18,400 keys between guest rooms and hotel apartments. This reflects a 10% increase in supply over a 12 month period, following two years of little new supply.
In total, 13 new hotels opened in 2015, adding approximately 1,900 keys to the hospitality sector. Of the current supply, approximately 84% is categorized as either 4-Star or 5-Star.
Based on the most recent figures released by Qatar Tourism Authority in July 2015, the total tourist numbers over the first half of the year reached 1.53 million. This reflected a 7% increase on the corresponding period in 2014.
Growing tourist arrivals resulted in occupancy rates increasing by 2% between January and June compared to the corresponding period in 2014. In contrast, statistics published by MDPS show that by Q4 monthly average occupancy levels had fallen compared to the previous year. The statistics were most noticeable in November 2015, which recorded average occupancy levels at 70% compared to 83% the previous November. A key factor behind this fall has been the increase in supply as new hotel developments completed throughout the year.
The Qatar Tourism Authority started monitoring the hotel apartment sector in 2015. Average occupancy levels reached 77% for the first six months of the year. DTZ research indicates that supply of hotel apartments is expected to increase by more than 100% by the end of 2018.
Average Daily Rates (ADR’s) have been reducing in recent years, a trend which continued in recent months. According to MDPS statistics, overall daily rates reduced from QAR524 to QAR511 between October and November, which represents a 12% decrease on the corresponding month in 2014.
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.
Occupancy levels and average daily rates are likely to be tested in the medium term as the supply of hotel rooms continues to grow in order to meet Qatar’s FIFA 2022 obligations. According to data released by QTA earlier in the year, 80 hotels and apartment hotels were under construction, which will increase supply by approximately 18,000 keys over the next three years.