Qatar hospitality market poised for phenomenal growth
Qatar’s hospitality market is expected to demonstrate the fastest annualised growth of more than 10% over a five-year period up to 2020, owing mainly to tourism-related developments ahead of the landmark FIFA 2022 World Cup in the country, a new report has shown.
Significant investments are being channeled into the development of tourism and hospitality related infrastructure in the country to accommodate the expected visitor traffic and provide avenues of entertainment and sightseeing, Alpen Capital has said in a recent report.
According to Alpen Capital, the GCC Hospitality market is expected to grow at a 7.6% CAGR from an estimated $25.4bn in 2015 to $36.7bn in 2020, despite a slowdown in 2016. However it is anticipated to recover in the long-term with upcoming events, robust fundamentals and government efforts, driving the continual rise in tourist arrivals and a robust pipeline of hotels and serviced apartments.
The key operating metrics of the sector is expected to remain under pressure in the short-term, mainly in the UAE and Qatar, but is likely to rebound in the long-term supported by growing demand.
During the forecast period, occupancy rates at hotels and serviced apartments are anticipated to grow by 3 percentage points (ppts) to 70% and average daily rate (ADR) is likely to increase at a 1.4% annualised rate during the period.
As a result, the aggregate revenue per available rRoom (RevPAR) of hotels and serviced apartments in the GCC is projected to grow at a CAGR of 2.3% to $133 by 2020.
Bahrain is likely to deliver growth in line with the regional average backed by tourism promotion activities and recovery in oil prices. Rest of the GCC nations are likely to register growth in the range of 5% to 6%, below the regional average.
During the forecast period, the total room supply in the GCC is expected to grow at a 4% CAGR, slower than 5.7% expansion in international tourist arrivals.
Large-scale international events, upcoming tourist attractions, and a growing MICE market are likely to accelerate tourist arrivals to the GCC region. International tourist arrivals to the GCC are anticipated to grow by 5.7% annually in the five years to 2020, Alpen Capital noted.
The GCC region’s MICE market is growing swiftly, with Dubai being recognised amongst the most popular cities for meetings and events. Acknowledging the opportunity, the other GCC nations are also developing large convention centers and undertaking promotions to attract international summits.
The tourism sector is seen as one of the key enablers of revenue diversification and job creation in the GCC, it said.
Accordingly, governments have framed long-term strategies to develop the sector by building infrastructure, encouraging private investments, and conducting extensive international promotion campaigns.
The GCC countries are expanding capacity at their airports and developing infrastructure to complement the government push for boosting visitor traffic to the region, thus providing a major incentive for increasing hotel capacities.
The GCC region holds one of the largest hotel development pipelines in the world.
Driven by the bright prospects of the tourism industry and government support, international hotel chains as well as domestic players have laid down robust hotel and serviced apartment development plans, Alpen Capital noted.