Hoteliers: Economics, not FIFA, assist Qatar
Hoteliers: Economics, not FIFA, assist Qatar
22 JUNE 2015 7:34 AM
There are 42 hotels comprising 10,714 rooms in the pipeline for Qatar, but that’s only a fraction of what’s needed to cover World Cup 2022 demand.
GLOBAL REPORT—Hotel companies aren’t fazed by news debating the threat of a FIFA World Cup 2022 withdrawal from Qatar, saying that their brand expansion plans are on course.
According to HNN sister company STR Global, 42 hotels with 10,714 rooms are in the development pipeline, of which 6,383 rooms in 26 hotels are under construction.
These numbers are but a fraction of the 45,000 new rooms required to cover the World Cup demand, according to Laurent A. Voivenel, CEO of UAE-based, HMH – Hospitality Management Holdings, an opportunity the group wants to capitalize on.
“It is too early to reveal, but we do have some lucrative projects under negotiation,” he said.
However, the Cup itself doesn’t justify expansion, but rather the infrastructure development, including roads, metro, malls, businesses and leisure attractions, partly triggered by the possible event. 
“Qatar is developing its leisure and business offering in tandem with the FIFA World Cup 2022. Last year, the WTTC had forecasted a 13.2% growth in tourism for the country, the fastest growth for the year,” Voivenel said. 
“If the event takes place, it will only be a milestone in Qatar’s life; the beauty is all the infrastructure it will leave behind continuing to attract tourists. Therefore, as an industry we all have to look at what the country will offer beyond FIFA 2022,” he said. 
Christophe Landais, managing director for AccorHotels in the Middle East, agreed, remarking the group wouldn’t comment on rumors. 
Accor development in Qatar is based on long-term economics, as well as anticipated demand generators of the country. Therefore, our development plans will not be affected by the FIFA Cup happening, or not, phenomenon,” he said.
Carlos Khneisser, VP of development in the Middle East at Hilton Worldwide Holdings, said agreements are signed focusing on long-term feasibility. 
“We see significant future potential to develop our brands in Qatar. Our strategy is based on the rapid growth of the country’s tourism industry and the increasing desire from investors and consumers for internationally branded accommodation,” he said. He lauded the Qatar Tourism Authority’s global marketing efforts, the new Hamad International Airport, and Qatar Airways’ growing destination network as contributors to increasing international visits by 91% since 2009. 
“All of this considered, as well as the incredible investment taking place to make Qatar one of the region’s most standout destinations; it is this ongoing global interest, rather than one-off sporting or cultural events, that make Qatar an extremely attractive proposition for hotel and tourism development,” Khneisser said. 
An upscale skew
Chiheb Ben Mahmoud, executive VP and head of the Hotels & Hospitality Group for MEA at JLL, points to Qatar, particularly Doha’s, attraction as a destination, having charted its own course for several years, well before the 2022 World Cup award. 
“Qatari sovereign entities, and private investors, have always attracted luxury hotel brands to the destination. Doha is among the first cities in the region to have a Four Seasons and a St. Regis, for example. It will also host the first Mandarin Oriental, as well as more art-and design-associated brands, such as Delano and Mondrian,” he said. 
“Qatar’s hotel offering remains skewed toward the luxury and upper-upscale segment, although there is a strong supply of locally branded and operated hotels and serviced apartments,” he added. 
The inclination to go upscale seems to have paid off. According to STR Global, Qatar’s present supply of about 15,200 rooms’ performance (April 2015 year to date), gives rise to optimism with occupancy of 76.6%, up 1.1%; average daily rate of 755.50 Qatar riyals ($207.55), up 12.3%; and revenue per available room of 579.02 Qatar riyals ($159.07), up by 13.5%. 
“The very high spending power of Qatari citizens, enjoying one of the highest revenue per capita in the world, right after Luxembourg and Norway, positively impacts even the local hotel market,” Ben Mahmoud said. 
“The Saudi market has been constantly growing as a feeder market for Doha. It presents the advantages of social conservatism, as well as luxury hotels at relatively affordable prices,” he added. 
Although hoteliers aren’t about to abandon a successful recipe, a tendency to diversify segments has emerged. 
According to STR Global, the majority (7,566 rooms) out of the total pipeline of 10,714 rooms are still in the upscale to luxury range, with the remaining 3,148 comprising lower branded segments, as well as unaffiliated hotels. 
Accor is adding a Pullman and MGallery next year, and another Adagio and Ibis in 2017, to its existing Mercure and an Adagio in the country. 
“By then Accor will operate a well-balanced portfolio of 60% upscale and 40% mid-market segments, with six properties of circa 1,300 keys. We are furthermore in discussions with various investors for further potential upscale and mid-market properties,” Landais said.
Hilton sings a similar tune. A Hilton and DoubleTree are in operation, another eight properties are in the immediate pipeline, including a Hilton Resort, Garden Inn and Waldorf Astoria. The group also chose Qatar to debut its first Curio in the region, in 2016.
“Doha is a corporate- and government-event-driven destination. Because of the social links across GCC families there is a strong volume of (visiting friends and relatives). It isn’t pent-up demand in the conventional sense, but more of an induced demand,” Ben Mahmoud said of operator trust in demand. 
Voivenel is pitching its Ecos brand, highlighting the business sense of budget and mid-market hotels, edged on by the blossoming of low cost airlines.
“In order to attract cost-conscious travelers, countries such as Qatar must widen their appeal amongst the fast-growing middle class in emerging economies of Asia and Africa, particularly India and China, by building more budget hotels,” he said. 

No Comments

Comments that include blatant advertisements or links to products or company websites will be removed to avoid instances of spam. Also, comments that include profanity, lewdness, personal attacks, solicitations or advertising, or other similarly inappropriate or offensive comments or material will be removed from the site. You are fully responsible for the content you post. The opinions expressed in comments do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Please report any violations to our editorial staff.