Qatari authorities plan to take legal action against landlords who inflate their prices during the FIFA World Cup in 2022, according to local reports in Qatar.
“The government is keen to issue a law to prevent a possible rent hike and prevent landlords from raising rents,” HE Abdullah bin Hamad Al Attiyah, Qatar’s deputy premier and Minister of Energy and Industry, told local Arab media in Qatar.
Al Attiyah’s comments came as rumours spread in Qatar that landlords would take advantage of the winning of the FIFA World Cup and would inflate their prices during the run up to the tournament.
This approach is not uncommon in Qatar as during the recent Eid Al Adha holiday period some resorts increased their rates by up to 50 percent.
Resorts in popular locations such as Sealine or Ghariya normally cost around QR1,000 per night, but rates have increased by more than 50 percent ahead of the Eid holiday season, according to the Doha-based The Peninsula newspaper.
The demand for rooms has seen located in Al Ghariya achieve nearly 100 percent occupancy, with local Arabic media reporting that all 38 villas, apartments and chalets in the resorts had been fully booked for the four day holiday period.
However, in the hotel sector, the FIFA official evaluation of the Qatar bid states that the average rack rate of contracts signed for existing properties range from $455 to $512 for five-star hotels, $275 to $328 for four-star hotels and $275 to $328 for three-star hotels.
This compares to an average daily rate of $162.56 across the Middle East and Africa region in October, according to a study by hospitality consultants STR Global.
In order to cater to the influx of fans and officials, Qatar is planning to have in place 240 properties to cater to accommodation needs during the FIFA World Cup 2022 tournament, according to the official bid documentation submitted to FIFA.
There are currently around 100 existing hotels, villages and compounds spread across the seven host cities. An additional 140 properties will be sourced or constructed to meet accommodation needs, “including a cruise ship project in Al Wakrah with 6,000 rooms,” the report added.
The report stated that two thirds of the new supply of inventory, which will amount to around an extra 55,000 rooms, will be covered by 17 construction projects, 13 of which will be completed by 2016.
As part of its bid, Qatar said it planned to double the number of hotel rooms to nearly 90,000 in time for the tournament, which will result in an investment of around $17bn over the next five years.
At present, 42 new hotels were scheduled to open in Qatar by the end of the year. However, Ahmed Al Nuaimi, chairman of the Qatar Tourism Authority (QTA) told Hotelier Middle East magazine in October that just 28 are likely to open by the end of the year.
“For the first half of 2010, there were eight hotels that opened. There are about 20 that are scheduled to open for the second half of 2010. The remaining hotels originally scheduled to open by year end 2010 will open in 2011. All in all, we expect about 40 hotels to open in the next 12 months.
“The delays in hotel openings were primarily related to renegotiations with contractors as the result of price adjustments coming out of the global economic crisis. Such negotiations take time. We are pleased to say that all of the projects are going ahead — that nothing has been cancelled,” Al Nuaimi said.
While the report said Qatar currently attracts around one million visitors a year and said it aims to grow the visitor numbers by 20 percent in the next five years, the country is already experiencing an oversupply in its hotel sector.
“The World Cup announcement has come at a crucial time in the growth of the hotel sector in Doha, which many privately feared was heading for oversupply and a rate war, as is being experienced now in Dubai’s Al Barsha district, for example,” said Guy Wilkinson, general manager at Viability, a Dubai-based hospitality consultancy company.
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