Quarterly Report Qatar Q2 2021: Hospitality Market Overview
Delays in projected hotel openings due to COVID-19 pandemic
The total supply of hotel keys in Qatar reached 28,300 by the start of 2021, which represented an annual increase of 1,200 keys. There are approximately 20,000 hotel keys under construction and expected to be completed by mid-2022. The delivery of hotel keys has been lower than expected over the past 12 months, indicating that COVID-19 has delayed construction schedules and projected opening dates.
The completion of new hotel projects remained slow in Q2 2021. The most notable new arrival to the market has been Banyan Tree by La Cigale, a luxury hotel located in the landmark Doha Oasis development in the Msheireb District.
The hotel market remains significantly affected by the COVID-19 epidemic and the related restrictions. According to the National Tourism Councils latest statistics report, visitor arrivals to March were 92% down compared to Q1 2020.
Demand for hotel rooms has been more difficult to quantify over the past year due to the Ministry of Public Health’s designation of a large number of hotels as quarantine facilities. Of the hotels that are available to guests, occupancy rates fluctuated between 54% and 65% for the first three months of the year. These levels, which are comparable to pre-COVID levels, are primarily driven by domestic tourism.
Average daily rates in January and February matched the equivalent levels for 2020 at QAR 361 and QAR 369, respectively. March saw a significant improvement in revenues, with average ADRs increasing to QAR 408. This reflected an increase of 8% on the previous month and a 48% increase on March 2020.
The easing of COVID-related restrictions, the take-up of vaccines, and the resumption of diplomatic ties in the GCC are all expected to boost regional travel, which will be a welcome development to the hotel sector in H2. While we hope to see an increase in arrivals to Qatar over the next six months, the re-introduction of quarantine hotels to the open market and the completion of new supply will maintain pressure on occupancy rates and room revenues.
The recovery in tourist numbers, post-pandemic, will rely on the delivery of new resorts, attractions, and leisure facilities. The importance of leisure tourism to Qatar has increased over the past year as the growth of virtual meetings and a general avoidance of unnecessary trips is likely to have a prolonged impact on global and regional business travel.
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