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Tue 5 Aug 2008 04:00 AM

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A measured ascent

A buzz has been building around Qatar as a business hub, but is there any broader tourism potential?

A buzz has been building around Qatar as a business hub for some time, but is there any broader tourism potential? Lucy Taylor considers whether there’s more to Qatar than its booming capital city.

Bordered only by Saudi Arabia and the Persian Gulf, the compact state of Qatar, jutting out on a small peninsula, could easily be overlooked on a map.

But over the past decade the country has dedicated itself to seriously developing its tourism industry, and is now in a position to fight it out with the top few destinations in the Middle East.

I don't think there's anything wrong with advancing slowly — as long as you are advancing, as long as you know where you're going, and as long as you're on a committed path.

According to information collected by global information publisher Euromonitor International, Qatar's future is looking bright.

The hotel sector is booming. By 2009, the state expects to increase its current 3000 room inventory to more than 10,000, with nearly 40 new hotels opening. Qatar Airways is one of the world's fastest-growing airlines, averaging close to 40% annual growth in both passenger numbers and revenue in 2006 - and its fleet is set to almost triple in size by 2018.

From 2000 to 2005, Qatar's gross domestic product (GDP) doubled from US $17.5 billion to more than $35 billion. And to top it all off, Qatar's travel and tourism growth is spearheaded by a government mandate, ensuring top-level support as the industry grows.

Needless to say, this has made the country an extremely attractive prospect for international investors, including hotel companies.

Send in the hotels

For a long time, Qatar has survived with a rather narrow portfolio of tourist accommodation, but now hotels groups are recognising the country's potential and are eager to establish a presence, as Qatar Tourism and Exhibitions Authority (QTEA) director of marketing and communications Daniela Grendene explains.

"The real challenge for Qatar has been the lack of sufficient hotel rooms, and the demand continues to grow," she says.

The Ritz-Carlton Hotel Company regional vice president, Middle East Pascal Duchauffour continues: "The vision of the government to build up a ‘knowledge economy' on a world class level has stimulated the growth of the nation's multiple infrastructure projects - highways, international airport, telecommunications, financial center, and so on - and taken it to world-class levels.

"This is a solid foundation and one of the key deciding factors in Ritz-Carlton being a part of Qatar's ongoing development".

Similarly, InterContinental Hotels Group vice president operations, UAE and Qatar Pascal Gauvin believes the momentum of the country's development efforts makes it a focal area for expansion.

"Besides being a major resource for oil and natural gas, Qatar is also becoming a key business and financial destination," he comments.

"The recent establishment of Qatar's Financial Centre will ensure the country's continued economic growth and development, while for the international business community it provides an exciting new window to access and share the opportunities this region offers. In addition, there is a massive push to develop the real-estate industry," notes Gauvin.

"For example the $2.5 billion man-made island development The Pearl. IHG is keen to establish the hospitality infrastructure to support the country's growth."

Coming soon

Qatar, or more specifically Doha, has a few household names already in situ; Four Seasons, Ritz-Carlton and Mövenpick all have operating properties there.But now new companies are coming in, and existing ones are looking to expand their presence.

IHG is a prime example. The global hotel group already has one property in Qatar - the 245-room InterContinental Doha - but as IHG's Gauvin points out, demand for luxury accommodation is such that anticipated visitor figures far outweigh current availability.

Last January IHG signed an agreement to develop the second InterContinental property in Qatar: the 530-room InterContinental Doha West Bay, and recently signed another agreement to develop the country's first Crowne Plaza - Crowne Plaza Doha Airport. Finally, catering to the mid-scale segment will be Holiday Inn Doha, currently under construction.

I think Doha is learning from some of Dubai's mistakes and is trying to avoid some of the issues there are in Dubai that Doha doesn't have.

IHG's development is symptomatic of how things are progressing as other groups enter Qatar - as the table below illustrates.

All work and no play

As increasing interest from hotel groups indicates, demand is there; although at the moment it seems to be predominantly from a business clientele. According to QTEA's Grendene, 95% of visitors to Qatar come for business, either on individual basis or attending a conference/exhibition.

So what are the hotels doing to attract more leisure travellers?

The recently renovated Sheraton Doha Resort and Convention Hotel, with 371 rooms, a sizeable conference center, 26 meeting rooms and a ballroom of more than 3300m², holds obvious appeal for corporate business.

But, as the property's executive assistant manager in charge of sales, marketing and front office Yves Tarabout explains, the hotel is always looking for new markets.

"We arere working with the Qatar Government, the destination management companies [DMCs] based in Doha, and airlines to promote the destination around the world." he says.

"A lot of work is also done locally as well, with the DMCs, as we try to be creative to attract guests to Doha and find the right angle to differentiate ourselves from surrounding countries."

IHG's Gauvin adds that while providing business accommodation is key for the Qatari market, the emirate is also strongly pushing leisure travel.

"We are expanding into Qatar with the right mix of [our] brands to cater for existing and potential hotel accommodation needs - both business and leisure," he explains.

Ritz-Carlton's Duchauffour says the group's two existing properties in Doha - The Ritz-Carlton, Doha and Sharq Village and Spa - both serve very different markets.

"One just has to take a quick look at The Ritz-Carlton, Doha to know that this is a hotel very much for the corporate traveller, from the Club Lounge, to the meeting rooms.

"At the other side of the city is Sharq Village and Spa, with its Arabesque-inspired architecture, low lying villas and the largest Six Senses spa in the region. This property is definitely for leisure travellers."

And according to Al Sharq Village and Spa general manager Hoss Vetry, the predominantly-business vibe in Doha is starting to change. "You look at it today and yes, it's primarily a business city, but it's changing its image. Sure, Doha today is considered as a business city but I think with all this development that's happening it will become a place where people will happily bring their families."However Ritz-Carlton area general manager Willy Ribbe thinks there is still a way to go for Qatar, even regarding its meetings industry business, and says that currently there is no real leisure market.

"I think it's still in the early stages; the MICE market is still not as strong as we'd like to see it. I think it will come in the future but at the moment it's not there," he asserts.

"They're building a convention centre right now and talking about it opening in 2011, so that will help a bit. Also Qatar Airways is expanding more and more, so there are an increasing number of destinations linked to the country," Ribbe points out.

"I think over the next three, four years you'll see a change in that; I think probably by 2010, when the airport is ready, that will make a big impact on the city. Plus we'll see about 12,000 extra rooms opening, so then we'll have enough rooms in the market to have big MICE conventions.

"However the tourism market is still very soft," he continues. "I think the thing we do not have is the infrastructure in place right now, in the way that they do in Dubai or Bahrain or Abu Dhabi - one golf course is not enough to attract that type of business from both sides. We do have beaches but not the same as other places - for me the beaches don't have that ‘wow' factor."

Another issue, claims Ribbe, is the country's "conservative" attitude.

"I think Doha is still a fairly conservative city, or state," he says. "It's very close to Saudi Arabia. And the cultures in places like Abu Dhabi, Bahrain and Dubai, they are a bit more [willing to have] certain things to attract tourism business. But hopefully that will change somewhat when more hotels open up and you have more variety.

"So there are some things people can do today, but it's not a leisure market," he concludes.

According to QTEA's Grendene, the leisure aspect of the country's tourism market is currently generated as an extension of the corporate market.

"This means people extending their stay by an extra day, or bringing their spouse or family along," she says.

"The leisure market is also generated by the stop-overs; people travelling to other destinations who are flying with Qatar Airways and choose to stop in Doha for a few days to enhance the overall travel experience."

But Grendene is keen to point out that in general Qatar does not target the mass market.

"The country does not target package holiday tours but rather the upper end of the sector," she says. "The focus is on business tourism, conferences and meetings, exhibitions, culture and sport. Qatar is not trying to establish itself as a tourism hotspot."

United Nations World Tourism Organisation (UNWTO) assistant secretary-general Geoffrey Lipman believes the country's careful and selective development will prove key to its success.

"I see that Qatar has the opportunity to not fall into the trap of looking for mass tourism," says Lipman.

"All the people I've spoken to in Qatar over the years understand that, and their vision is for quality tourism, even in the leisure business, and to make sure they have in place the infrastructure and the service to be able to cater to that as well as cater to the high-yield business, corporate and events markets."

"I think this country has the ability to not only position itself in that way, but to make sure its development is planned and takes account of how to capture that kind of traffic." Slow progress

As Lipman points out, development is underway in Qatar but things are progressing at a measured pace.

"Perhaps it's because I'm getting older, but I don't think there's anything wrong with advancing slowly - as long as you're advancing, as long as you know where you're going, and as long as you're on a committed path," he remarks.

"I think you have to see where you want to position yourself in the long term and start now, but don't necessarily leap into everything because things evolve."

But is this unwarranted caution, or a sensible strategy? QTEA's Grendene comments that it is still early days. "Qatar is a very young destination and development has actually become very strong in a short period of time," she argues.

"But we still need to give time for the required infrastructure to being built, based on the vision of the Emir and the Government".

Ritz-Carlton's Duchauffour thinks this measured approach is ideal.

"It is important to plan, assess and constantly evaluate the progress of development, so that all elements - the building of roads, expansion of airports and important civil services, arts and culture institutions, financial sectors, and construction of hotels - are growing at the same pace and are all sustainable in the long run," he points out.

IHG's Gauvin holds a similar view. "This allows the country to establish a sustainable infrastructure based on accurate planning and implementation, with a more powerful vision for the future," he explains.

"Today, Qatar wants to be positioned as a niche travel hot spot and is aiming to attract short-stay leisure and business travellers. Reaching this goal requires long-term vision and planning, which does not happen overnight."

Support from the top

Much of this structure and planning has of course been done by the government of Qatar, which has provided an impressive amount of support to the country and to investors.

As IHG's Gauvin explains, Qatar is planning to invest $15 billion in the tourism infrastructure and increase the number of tourists by 150% to 1.4 million by 2010. On top of this, the first phase of New Doha International Airport is set to open in 2009. "These initiatives will expand Qatar's tourism infrastructure and facilitate intra-regional and international travel," asserts Gauvin.

All about Doha

It is clear that so far, the capital city of Doha is leading the way in turning the country into a tourism hub.

Indeed, as QTEA's Grendene comments, "everything at this moment is pretty much in Doha, except of course for the desert and Khor Al Udaid (the Inland Sea)".

Another quick to point out Doha's merits is Ritz-Carlton's Duchauffour.

"Doha is gaining tremendous ground as an education, sports and banking hub," he says. "With the growth in those sectors, we expect to see a lot more corporate travelers and expatriates into Doha as they play a huge part in setting the city - and themselves - up for success."Similarly enthusiastic about the city's future is Al Sharq's Vetry. "I think it is a growing city; it is the next hub in this region," he claims.

"The authorities are really doing a great job - the way they're developing [Doha] is unbelievable. It's really the next upcoming place."

"It's like Dubai maybe five years ago. I think Doha is learning from some of Dubai's mistakes and is trying to avoid some of the issues there are in Dubai that Doha doesn't have."

And as Sheraton's Tarabout notes, there is definite marketability for a modern city that manages to retain its sense of Arabian culture.

"It's a cornerstone between Asia, Europe and the Middle East where you find sunshine all year around," he says. "Then there's also the extensive sandy beaches; the desert, with incredible sand dunes falling into the sea; and the high quality hotels. And still there's a sense of history and culture."

It's a certainly compelling picture - but is there any more to the country than its capital city?

Ritz-Carlton's Duchauffour says development will soon start spreading out from Doha. "As a peninsula, Qatar is blessed with the Arabian Gulf surrounding almost all of the country's boundary, which could bode well for future tourism projects and waterfront residential living in the near future," he predicts.

According to IHG's Gauvin, there's a great deal more than Doha to satisfy visitors. "There are several picturesque Qatari towns along the peninsula's coast where business and leisure tourists can enjoy a true Arabian experience," he says.

"In addition, Umm Said is the heart of Qatar's industry; it has both a commercial port and an oil-exporting port. There are refineries in Umm Said as well as other industrial establishments producing steel, natural gas liquids, fertilisers, and petrochemicals."

However this element will hold little appeal for the burgeoning leisure tourism market, and Gauvin admits that "as the country's capital, Doha will always remain the business, financial and leisure centre of the state".

Sheraton's Tarabout suggests the lack of development is itself a draw, offering tourists the opportunity to experience the country's natural attractions.

"It is well worth getting off the beaten tracks to find Qatar's natural beauty; very close to the city there is a wide range of activities to discover," he says. "The inland sea is a totally unique site and sitting down on top of a dune watching the sun set over the sea is simply unforgettable."

The future

Clearly a lot more development is on the cards for Qatar, as QTEA's Grendene details. "The overall infrastructure is growing and is being further developed - from various hotels and the recent restoration of the Souq Waqif to the new Museum of Islamic Arts, the Doha Convention Center and Tower and The Pearl - Qatar," she says.

Ritz-Carlton's Willy Ribbe believes that in five years' time, Qatar will be booming. "There will be a bit of a dip next year I think, in 2009, because we're opening so many hotels," he predicts.

"If everything goes according to plan I think there will be eight or nine new hotels in Doha. But in 2010 there will be enough new projects completed to pick up again."

UNWTO's Lipman claims that Qatar has "unlimited potential, providing it positions itself right as it goes through the process of developing its tourism strategy".

"It's fortunate in a way that it hasn't been at the leading edge of development; it's had time to consider where it wants to position itself," says Lipman.

It appears that, within a few years, Doha will be flourishing. The rest of the state still has some way to go regarding tourism development - but this is no reason to dismiss Qatar as a future Middle Eastern hub: the country undoubtedly has the will to succeed in this highly competitive market, and its measured approach to development seems to be working.

For Qatar, it may be the case that slow and steady wins the race.

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