Qatar's riches

Qatar is focused on doubling its current visitor numbers by 2010. Louise Oakley discovers how it will do it.
Qatar's riches
The Hilton Doha is one of the projects announced by Hilton Hotels this year.
By Louise Oakley
Wed 26 Aug 2009 04:00 AM

Being ranked as one of the richest countries in the world is not enough for Qatar, which is focused on doubling its current visitor numbers by 2010. Louise Oakley discovers how sporting bids and cultural events aim to drive a new leisure traveller to the market.

Qatar is the richest nation in the GCC and one of the richest in the world with a GDP per capita in 2008 of almost US $72,000, according to the latest Global Insight from Jones Lang LaSalle (February 2009).

During the current global economic downturn, Qatar stands out from the crowd, with GDP growth of 6% predicted for 2009 (Kuwait Finance House, Global Insight, February 2009), the fastest economic growth rate among the world's richest nations.

This has led Jones Lang LaSalle to conclude in its World Winning Cities report entitled Doha: Global Ambition, Regional Influence that Qatar is, as a result of its huge natural gas reserves, "punching well above its weight as one of the world's richest and most dynamic economies".

And in a strategy that will no doubt attract more hotel investors and developers - and ultimately, more tourists - Qatar has, according to Jones Lang LaSalle, taken "the art of place making further" as it develops a combination of "best-in-class sporting, cultural, leisure and other attractions to create a strong brand and identity on the global stage". In a sporting context, although unsuccessful in its bid for the 2016 Olympic Games, Qatar has since bid for the 2020 Olympic Games, as well as the FIFA World Cups in 2018 and 2022. If there is a positive outcome, the market will become ripe for hotel development.

In addition, tourism arrivals and hotel occupancies are planned to be bolstered through the creation of a new international airport, as well as the growth strategy of Qatar Airways and cultural attractions such as the Museum of Islamic Art, which opened earlier this year.

Alongside these "place-making" efforts, Qatar is also focused on infrastructural development, with two key projects including The Pearl-Qatar - which features three five-star hotels and a two million m² leisure hub - and Lusail, featuring the Entertainment District.

However, real estate market transparency is well below advanced markets, and Jones Lang LaSalle suggests that "the establishment of an active real estate regulator and the creation of more publicly-listed companies could stimulate the pace of change and market maturity".

And, although Qatar was the first market in the Middle East to open to outright foreign real estate ownership in 2004, most investors remain local or regional players, meaning foreign investment has been relatively untapped to date.

Hotel scene

The existing hotel stock in Qatar is approximately 5100 rooms. A further 2300 rooms are expected to be introduced by 2011 within the four- and five-star hotel market. Occupancy during Q1 averaged at a healthy 73%, but the typical summer drop witnessed by Qatar caused occupancy to drop below 50% in June this year, according to STR Global.

The total number of visitors in 2007 was 780,000, with this targeted to reach 1.4 million by the end of 2010.Demand has increased in-line with the growth of business activity in the region, resulting in 65% of total visitors to Doha coming from the corporate sector, according to Doha: Global Ambition, Regional Influence.

The report concluded that leisure travel for sporting and other events is likely to increase in the long-term, but that for the foreseeable future the business and convention sector will remain the major driving force of Qatar's tourism mix.

This is a sentiment largely agreed with by the hotel management companies that have recently launched projects in the region.

Hilton Hotels has recently announced two new developments in Qatar's capital in partnership with the New Doha Hotels Company - Hilton Doha and the 288-apartment Hilton Doha Residence.

Hilton Hotels Middle East vice president development Ivor McBurney says that the potential Qatar holds for business and MICE tourism is huge, with the opening of The Qatar Foundation's Qatar National Convention Centre scheduled for late 2010 and the United Nations World Tourism Conference planned for next year.

"The country is also preparing to become the Arab Capital of Culture in 2010 with the 99-hectare US $82 million Cultural Village under construction," says McBurney.

"All of these initiatives provide opportunity for us to further expand our portfolio with a positive outlook on occupancy levels," he adds.

McBurney is confident that 2009 is a good time for Hilton Hotels to develop its Qatar properties ahead of their launch in 2010.

"The government's initiative to boost the tourism sector in the region with the aim to welcome 1.4 million visitors by next year and raise the average length of stay from 1.5 to four days provides us with the perfect market opportunity to launch Hilton Doha Residence. It represents a perfect match for our Hilton hotel which opens in 2010," he asserts.

"In addition, Qatar Airways recently announced the airline will forge ahead with its global expansion plans despite the economic downturn, introducing six new routes across India, Australia and Europe in the next 10 months, making Qatar increasingly more accessible for international travel," adds McBurney.

Varanyou Tippayamontri, international development manager - Asia for Best Western International - which opened Best Western Doha Seef in June - agrees that 2009 is the perfect time for the company to enter the Qatar market.

"There is not a better time to enter the market for a three- to four-star star plus category in Doha.

"Economies change but the demands for hotel rooms continue to grow. We strongly believe that Best Western offers the right fit for today's value-for-money quality accommodation," says Tippayamontri.

"Best Western positions itself where it is strongest, in the midrange plus category. Our strategic location in the Old District, 20 minutes from Doha International Airport and walking distance to Doha Port makes Best Western Doha Seef Hotel the best value hotel for a US $150 ADR range starting from a standard room.

"While business and finance remain the major drivers for travel, there have been significant efforts to introduce Qatar as a sports and recreation destination. Museums, cultural centres, forts and parks have been restored to create a very leisure-friendly state," adds Tippayamontri.

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