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The next boom in Qatar’s hospitality sector

Qatar launched the Next Chapter of its National Tourism Sector Strategy 2030, in September 2017. The five-year plan, which was approved by the Supreme Council for Economic Affairs and Investment, is of crucial importance to accelerating the pace of tourism projects that will attract tourists to visit Qatar, as well as activating policies that will promote growth of the sector.

The Next Chapter aims to attract 5.6 million visitors to Qatar annually by 2023, double the number which the country welcomed in 2016. It also aims to achieve a 72 percent occupancy rate across all hotel establishments, through a combination of increasing demand and diversifying the country’s tourist accommodation offering.

In a sign of growing optimism in Qatar's tourism industry, the hospitality sector is all set to add around 5,000 more hotel rooms this year to take the total tally to 31,000, according to ValuStrat.

Giving the break-up of numbers, ValuStrat said the highest number of rooms will be added by the Minor Hotel Group, which is building two properties in Doha and one in Al Wakrah. The projects will be completed in 2018 and add 350 more rooms.

Likewise, more rooms will be added by upcoming projects including the Salwa Resort (next to Aqua Park), Grand Mercure Hotel, Zulal Wellness Resort, Ezdan Palace, M Gallery Boutique Hotel, Panaroma Residences and Suites, and Dusit Hotel and Suites.

The luxury waterpark and four-star hotel launched by Katara Hospitality in Qetaifan Island Lusail will be complete by 2020.

DTZ records indicate that hotel supply approached 25,000 keys by Q4 2017. The most notable new hotels in recent months include the Holiday Inn and Premier Inn which are located at Airport Road and Education City respectively. These hotels will increase supply of internationally branded mid-market hotels and will target business travelers and tourists with more modest budgets.

Despite the welcome arrival of new 3-star hotels, the market is still dominated by luxury brands. More than 85% of room keys and almost 70% of establishments in Doha are still either 4-star or 5-star.

Qatar's hospitality sector has further improved its guest experience ranking from first place among the GCC to first place in the Middle East, according to the Guest Experience in the Middle East Report, released by hospitality and travel data providers Olery.

Qatar hospitality market insights

Investment in travel and tourism
Travel & Tourism is expected to have attracted capital investment of QAR6.2bn in 2017. This is expected to rise by 9.2% in 2018, and rise by 7.8% pa over the next ten years to QAR14.5bn in 2028.

Visitor exports
Visitor exports are a key component of the direct contribution of Travel & Tourism. In 2017, Qatar generated QAR44.6bn in visitor exports. By 2028, international tourist arrivals are forecast to total 6,240,000, generating expenditure of QAR102.7bn, an increase of 9.1% pa.

Travel and tourism contribution to GDP
The direct contribution of Travel & Tourism to GDP in 2017 was QAR19.9bn (3.3% of GDP). This primarily reflects the economic activity generated by industries such as hotels, travel agents, airlines and other passenger transportation services (excluding commuter services). It also includes the activities of the restaurant and leisure industries directly supported by tourists.

The direct contribution of Travel & Tourism to GDP is expected to grow by 8.7% pa to QAR44.9bn (4.0% of GDP) by 2028.

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