May 16, 2022

Quarterly Report Qatar Q1 2022: Hospitality Market Overview

Hotel occupancy remains stable, despite the challenges posed by COVID-19

The National Tourism Council’s annual tourism statistics for 2021 were released in Q1 and highlighted the impact that the COVID-19 pandemic has had on the sector.

While visitor numbers grew by 5% in 2020, the 581,000 arrivals represented a 71% fall on pre-pandemic levels (2019). Despite the fall in numbers, occupancy rates in Qatar have remained relatively stable, partly due to the demand created by the requirement for quarantine facilities.

According to the NTC, demand for hotel accommodation grew to 7.1 million room nights. This reflected an increase from 6.5 million room nights in 2019; however, 35% of this demand was generated by quarantine requirements. ‘Non-quarantine’ demand for hotel rooms in 2021 reflected a fall of approximately 28% on 2019 levels, which better reflects the impact that COVID-19 has had on the hotel industry.

Throughout the pandemic, the lack of visitor arrivals has been compensated to some degree by an increase in demand for domestic breaks from Qatari citizens and residents. Between 2017 and 2020, Qatar’s principal source markets moved from the GCC to India and China. The restoration of diplomatic ties in
the GCC saw a return of visitors from Saudi Arabia, which established itself as the second-largest source market behind India in 2021. As COVID restrictions ease, we expect significant growth in visitors from Saudi Arabia.

The NTC’s annual report shows that occupancy rates in Qatar increased from 57% in 2020 to 67% in 2021, with 3-star hotels performing strongest at 84%. Average Daily Rates in Qatar increased by 8% on 2020. The 5-star sector was the only category to see ADRs reduce last year due to reduced pricing for quarantine facilities.

Qatar’s hotel room supply reached 29,386 by year-end 2021, which reflects a 6% compound average growth rate per annum since 2015. By 2026, the overall supply of hotel keys is expected to reach 50,000. It is expected that 5,000 new hotel keys will be completed ahead of the FIFA World Cup in November. This new supply, coupled with existing hotel supply and serviced apartments, will deliver approximately 37,000 keys, or 45,000 rooms.

Qatar will benefit from a unique opportunity to promote and expand tourism by hosting the FIFA World Cup in 2022. We expect tourism from global markets to grow significantly in the next 5 years, while the return of the Saudi market will also boost tourist arrivals. Strong growth in tourism numbers will be required to support occupancy rates and revenues as supply continues to grow.

Cushman & Wakefield Quarterly Report Qatar Q4 2021