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Friday, April 23, 2021

Report warns of post-World Cup hotel hangover in Qatar

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Katara - Grant Matthews-Flickr

Qatar’s hoteliers could have trouble filling their rooms in the years before and directly after the 2022 World Cup, unless the country’s tourism sector picks up even more steam, a new report has concluded.

Though the number of visitors to Qatar is increasing rapidly, the number of hotels is growing even faster as hospitality businesses construct new accommodations to meet demand for the tournament, according to business advisory firm Deloitte.

Not everyone coming to Qatar for the World Cup will be staying in full-service hotels in Doha. Early plans call for many rooms to be located outside the capital city, and for some of the accommodations to be in “hotel apartments and serviced apartments.”

FIFA requires Qatar to have at least 60,000 rooms for visitors ready for the football tournament, although Qatar’s bid document included plans in 2010 for roughly 100,000.

In contrast, Deloitte estimated Doha would only be able to support 38,000 hotel rooms by 2022 outside the actual World Cup tournament. The firms’ most recent hotel market report continued:

“While investment into the hospitality and tourism sector in Qatar is growing and demand is steadily increasing, there is a risk that the demand growth will not be sufficient in order to sustain this level of supply growth post-2022 FIFA World Cup.”

When the party’s over

Qatar is not alone in that most countries that host mega-events are left with an oversupply of hotel rooms once athletes and spectators pack up. However, the last two World Cup tournaments were held in much larger countries that constructed far fewer new rooms than what’s planned here.

FIFA Brazil Fan Zone

For example, hotel data firm STR Global said Brazil’s room supply grew by 1 percent annually in the lead-up to this year’s World Cup. Many of those newly constructed rooms are expected to once again be in high demand when Rio de Janeiro hosts the 2016 Olympics.

But South Africa, the host of the previous World Cup, faced more challenges following its hosting of the 2010 tournament. The global recession dampened tourism levels and pushed occupancy rates down to as low as 53 percent in the over-supplied market, according to a local media report.

However, tourist numbers kept rising after the tournament, and the country’s hotels are predicted to finish this year with a 62 percent occupancy rate.

Still, South Africa only constructed 10,300 new hotel rooms for the tournament, bringing its total to 58,000, according to consulting firm PwC. The new rooms are a fraction of what Qatar is planning.

Destination Doha

Qatar attracted a record 1.5 million visitors during the first half of this year (an uptick of 7 percent), due in part to a big push by the nation’s tourism authority. But the number of new hotel rooms has been increasing at an even faster rate, according to Deloitte.

Construction

The company said Doha’s supply of hotel rooms stood at nearly 13,600 at mid-year and has been growing by an average of 13.4 percent annually since 2008. Thousands of additional rooms, mostly in the upscale and luxury market, are in various stages of planning or construction.

But rather than being driven by market fundamentals – namely, high occupancy rates sustained over several years – hotel construction is part of the country’s preparations for the international football tournament.

This market “mismatch,” Deloitte said, has forced hoteliers to cut their rates in recent years to compete for customers. Average daily rates continue to edge downwards and revenue per available room – a common hospitality industry metric – in Doha is still down by nearly a third from its pre-financial crisis high in 2008.

While occupancy rates have recently been higher, averaging 72 percent year-to-date in August, the Qatar Tourism Authority said earlier this week that the improvement was due in part to a temporary supply reduction as several hotels – such as the Sheraton – undergo renovations.

By Deloitte’s calculations, demand for hotel rooms in Doha grew by an average of 11 percent annually for the past five years. If that trend continues and the city’s hotels stay at least 60-percent filled, Deloitte predicts Doha could support 38,000 hotel rooms by 2022.

How many rooms will be sitting empty after the tournament remains unclear, as is the exact number of hotel rooms expected to be in place for the World Cup.

FIFA’s bid evaluation showed that it expected approximately 100,000 rooms to be available by 2022, slightly more than a third of which would be in Doha.

While that may roughly align with Deloitte’s demand projections, there’s also the question of rooms located in cities and towns outside Doha that are far less popular with tourists than Qatar’s capital.

Photo for illustrative purposes only.
Photo for illustrative purposes only.

For example, FIFA expects there will be 40,000 rooms in Al Wakrah for the tournament. That includes some 6,000 rooms on cruise ships as well as 27,000 rooms FIFA said already existed in Al Wakrah at the time of its evaluation in 2010.

Officials at Qatar’s organizing committee, the Supreme Committee for Delivery and Legacy, said they are working to ensure the accommodations will be used after the tournament:

“The Supreme Committee for Delivery & Legacy is working closely with the Qatar Tourism Authority to ensure that the hospitality accommodation being developed is sustainable and contributes to the legacy of the 2022 FIFA World Cup,” the committee said in an emailed statement.

The Qatar Tourism Authority did not respond to a request for comment, but pledged earlier this year to spend billions of riyals in an effort to dramatically increase the number of tourists to the country.

The country is placing a particular emphasis on attracting more leisure visitors from outside the Gulf by marketing and developing more tourism-related products and services.

Thoughts?

22 COMMENTS

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thedrizzle96
thedrizzle96
6 years ago

27,000 rooms in Wakra seems a bit…optimistic

Jaded
Jaded
6 years ago

Minimum 60 thousand rooms? WE WILL BUILD ONE HUNDRED THOUSAND ROOMS!!!

Let’s aim for 60 first, shall we. This will end up being like the max 12 stadiums target that’s now been cut to the minimum 8, with fingers crossed.

Expat_QTR
Expat_QTR
6 years ago

All i see them building is the 5* and Superior 5* hotels. Not all coming for the World Cup are that rich as they would spend a huge sum on match tickets as well so they should consider building some aparthotels and even some budget hotels.
Tourists visiting Doha are also left with very minimum options in terms of sight seeing. so hope they come up with something innovative in order to attract more Tourist which leads us to Visa problem which they do not provide.
Just a Question on Visa: how are all the spectators coming for FIFA going to get VISA? Who will sponsor them?
We can just hope and wish everything is considered.

greg
greg
6 years ago
Reply to  Expat_QTR

they will come on a Tourist Visa

The Reporter
The Reporter
6 years ago
Reply to  Expat_QTR

The Qatari vision for the future is of a 5* destination. Nobody will invest in 2-3* hotels.

Huzz
Huzz
6 years ago
Reply to  The Reporter

It goes to show the gap between vision and reality.

Ben
Ben
6 years ago

90% of those who will come to watch games will not want to stay in 5* hotels, otherwise it’ll end up being the most expensive WC in history for fans (it wont be far off anyway).
They need some cheaper Holiday Inn type hotels and if it gets moved to the winter, temporary campsites. In South Africa hostels and campsites were far more popular because of the price of hotels. I was in Germany for three weeks for the 2006 WC and camped the whole time with one campsite only costing 3 euros a night!

fullmoon07
fullmoon07
6 years ago
Reply to  Ben

and you were in green Germany…imagine here….they should do desert camps! So they put together football and desert culture…but I guess it would cost more than 3 euro. If, and I repeat, if Qatar hosts this 2022 WC it will be the one with less spectators ever….and the new hotel rooms will be empty; many will go to Dubai and come for the day. Tourism hit and run

MIMH
MIMH
6 years ago

This is all assuming that the WC takes place in Qatar in 2022, I don’t think that is a given just yet. Plenty more water to go under the bridge and the opaque politics of FIFA is in play. They would have no problem selling their friends out in Qatar if it meant they could keep their cushy positions and deflect some of the bad publicity elsewhere.

Saleem
Saleem
6 years ago
Reply to  MIMH

After the last “investigation” I am convinced that they will just keep it with Qatar.

The Reporter
The Reporter
6 years ago
Reply to  Saleem

Totally agree with that. FIFA are happy to fend off claims of corruption but they won’t dare lose face by moving the WC from Qatar.

David
David
6 years ago

According to the article Doha had 13,600 hotel rooms at the mid-year mark of 2014, but according to FIFA Wakra had 27,000 hotel rooms in 2010. Did FIFA even check to verify this or did someone just make up a number. Where are the 27,000 hotel rooms? Maybe 270, but not 27,000. Are there even 27,000 people in Wakra?

Expat_QTR
Expat_QTR
6 years ago
Reply to  David

i guess they are referring to the Ezdan Village which was built during the 2006 Asian Games. But now are rented out to expats so that they cannot keep it vacant. They shouldn’t ask all the occupants in Ezdan to relocate for the World Cup fans which will i am sure cause a major issue and leave a lot of ppl homeless.

SullyofDoha
SullyofDoha
6 years ago

It might not matter to the fans. They could always fly into the UAE and use Dubai orAD as their base and only fly to Qatar for match day! Don’t think for a second the hoteliers and airlines such as Fly Dubai, Emirates and Etihad will miss out on an opportunity to capture as much of the WC tourist market segment as possible!

fullmoon07
fullmoon07
6 years ago

cities and towns outside Doha???
They are no bigger than villages.

Myrddin
Myrddin
6 years ago

This appears to be based on the same supply and demand model that is applied to residential accommodation in Doha. One big twisted Cluster-f*@k

The Reporter
The Reporter
6 years ago

Can I just point out the mistake in the article? It talks about “..the country’s tourism sector…..”. From my many years being involved with hospitality I can say with some confidence that Doha will never have a “tourist sector” of any significance that involves travellers to the country from the west. I’ll take bets on the number of 4* & 5* hotels that go bust after the WC (there won’t be any 2* or 3* because after the WC no Arab would use them. As for the WC, you will not get 1000’s of ordinary supporters getting on a plane and lugging their tents to the Qatar desert, and even less driving through the ME in their campervans as WC2006 Germany. But I’ll come back to my original thinking which is that the last thing that Qatar is planning on is a mass of ordinary football fans – it just want corporates to pay and I still reckon that many games will be almost free entry.

Mr. B
6 years ago

That figure of 1.5 million tourists must include people like me – who spent a year on running back and forth on a tourist vista before leaving Qatar permanently. Are those numbers coming from how many visas were issued, or based on how many hotel rooms were used? If the former, it’s definitely inflated – and I’m part of it.

Mitch Lawrence
Mitch Lawrence
6 years ago
Reply to  Mr. B

Exactly. The government can keep convincing themselves that all those visa on arrival entries are tourists. Riiiiight…

Myrddin
Myrddin
6 years ago

The sensible solution for WC2022 – Coastels

Lots of them. Ship in thousands of budget level rooms, after the WC ship them out again!

MrJames
MrJames
6 years ago

Build 20,000 self catering apartments, with on-site supermarkets:

1. For the World Cup, great accommodation for football fans on a budget.
2. Afterwards, let them as budget apartments for expat workers and small families.

The Athletes Village for London Olympics 2012 is now ‘East Village’: 2200 homes, 1600 of which are affordable for lower income families. No reason why Qatar can’t follow a similar model.

Martin
Martin
6 years ago

Hans Christian Anderson identified this problem years ago in a report called The Emperors New Clothes

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