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Qatar’s hotel pipeline set to ease despite robust occupancy: CWQ

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By April, the overall supply of hotel key in Qatar reached 39,715, of which approximately 10,000 were hotel apartments, adding about 90% of hotel rooms in Qatar are classed as four star of five-star, with the majority of apartments being classed as ‘deluxe’. 
FILE PICTURE: Thajudheen

By April, the overall supply of hotel key in Qatar reached 39,715, of which approximately 10,000 were hotel apartments, adding about 90% of hotel rooms in Qatar are classed as four star of five-star, with the majority of apartments being classed as ‘deluxe’.
FILE PICTURE: Thajudheen

Qatar is likely to witness reduced pipeline of new hotels in future although occupancy levels and average daily rate (ADR) were seen robust, according to Cushman and Wakefield Qatar (CWQ).

While overall occupancy rates and ADRs have performed relatively well this year to date, several hotels have struggled to gain traction in an increasingly competitive market, CWQ said in its recently released report.

“The prevailing market conditions have resulted in reluctance from investors to support new hotel development, which has reduced the pipeline of future supply in Doha,” it said.

By April, the overall supply of hotel key in Qatar reached 39,715, of which approximately 10,000 were hotel apartments, it said, adding about 90% of hotel rooms in Qatar are classed as four star of five-star, with the majority of apartments being classed as ‘deluxe’.

“While the pace of new supply has slowed over the past year, the total number of rooms reflects an increase of more than 45% in five years, putting pressure on hotel occupancies and the performance of hotel restaurants over a sustained period,” according to the report.

In June, the Prime Minister and Minister of Foreign Affairs HE Sheikh Mohammed bin Abdulrahman bin Jassim al-Thani launched the Simaisma Project, led by Qatari Diar and represents the most significant tourism project in Qatar to date.

It aims to establish an internationally recognised tourist destination and forms part of Qatar’s ambitious National Development Strategy 2024-30, which seeks to diversify economic growth. It will feature 16 resort hotels, a theme park, an international standard golf club, a yacht club and marina and significant retail and restaurants provisions.

The National Tourism Council’s latest statistics report reflected a buoyant tourism and hotel sector in Q1-2024. Tourist arrivals to Qatar surpassed 1.6mn in the first three months of the year, a 40% increase on 2023. This created a demand for room nights in hotels of 2.6mn, up 37% on the previous year.

Saudi Arabia is Qatar’s largest source market for visitors for Qatar with 28% of overall visitors coming from the neighbouring country. India represents the second biggest market at 7%, while the third highest number of visitors came from Germany (5%) in the review period.

The increase in visitors has boosted the performance metrics for the hotel real estate sector with occupancy up from 54% in Q1- 2023 to 75% this year. Monthly occupancy peaked at 85% in February, coinciding with Qatar hosting the Asian Cup and Web Summit.

The increase in demand also boosted hotel revenues in Q1-2024 with ADR’s up 10% year-on-year to QR481 and RevPARs (revenue per available room) up 53% to QR361. According to statistics released by the National Planning Council in April, overall occupancy was 63% while ADRs were QR463, up from 47% and QR442 in April 2023 respectively.

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