Qatar hotels will need to slash room rates and offer more interesting dining options to attract guests during the ongoing economic slowdown, a new report has said.
More than a third of all hotel rooms in Qatar are predicted to sit empty by the end of this year, according to US-based Colliers International.
In its latest report on Qatar’s hospitality sector, the real estate company noted that demand fell during the second quarter of this year.
This was due to a drop in oil prices, a slower economy and Ramadan, the firm said.
And in the first quarter of this year, government figures showed hotel occupancy at 70 percent – down some 14 percent from the same period in 2015.
This is despite a record number of visitors to Qatar in March – more than 300,000 in one month, the Qatar Tourism Authority (QTA) said at the time.
More empty rooms is a trend that’s expected to continue through the rest of 2016, with occupancy rates forecast to hover around 64 percent by December.
That would signify a drop of 11 percent based on figures for the same period last year.
However, the report noted that Qatar’s hotels are still doing brisker business than other Gulf cities that rely heavily on corporate stays.
Competition heating up
To help it stand out in this new market, venues will need to think of more inventive dining options, Colliers said, continuing:
“If successfully implemented, F&B revenue can account for as much as room revenue, or even more in some cases. Having a more attractive F&B offering will also lead to a more appealing property.”
Another way hotels can attract visitors is by dropping prices.
According to Colliers, the cost of staying in a hotel in Doha is expected to fall 7 percent from last year’s prices, to an average of US$182 (around QR660) by year-end.
For luxury hotels, corporate bookings are expected to continue to make up some three-quarters of hotel reservations.
But discounts through online booking sites will become increasingly important to hotels that wish to attract more guests, Colliers said.
Despite falling demand, the building spree of hotels and apartments in Qatar continues.
Some 538 new hotel rooms became available in the second quarter of this year, following the opening of new businesses including the Centro Capital Doha in Bin Mahmoud.
That takes the total number of rooms in Qatar to 16,243.
By the end of 2018, a slew of new hospitality launches is expected to cause the number of rooms to grow by more than 7,000, to 23,567.
Next year is set to be one of the busiest years for new openings, with 14 hotels planned to launch, according to a separate new report by Tophotelprojects.
In the pipeline for a 2017 opening are venues including the Pullman Doha West Bay, JW Marriott West Bay, Hilton Garden Inn Doha Al Sadd and the Millennium Plaza Doha, which will be in the Barwa Al Sadd development on C-Ring Road.
With 41 hotel projects in total in the works, Doha is the third-busiest city in the MENA region for hospitality construction, the report noted.
Dubai came first, with 133 projects, while the Saudi city of Riyadh was second with 47 hotels .
However, Colliers noted that more than 20 percent of planned projects have already been delayed by at least a year.
This has affected a number of landmark hotels across town. That includes the Mandarin Oriental in Musheireb, which pushed back its original 2014 opening date by two years.