Quarterly Report Qatar Q2 2022: Hospitality Market Overview
A strong increase in visitor numbers from GCC Countries boosts the hospitality sector.
Visitor numbers to Qatar continue to recover in 2022 following the impact of COVID-19 on the tourism sector. According to the Planning and Statistics Authority (PSA), visitor arrivals to Qatar in May 2022 were recorded at 166,090, which is a 9.7 fold increase on the same month in 2021.
Over the past 12 months, there has been a steady increase in visitors from within the GCC. Official PSA figures show that GCC visitors made up 54% of arrivals in May, up from 40% the previous year. This reflected an increase of almost 83,000 GCC visitors throughout the month.
Overall occupancy rates fell for the year to April fell from 61% to 44% and remained on par with May 2021 at 58%; however, the statistics for 2021 excluded a substantial number of hotels that were utilized as quarantine facilities throughout the year.
Throughout the COVID-19 period it is estimated that 35% of demand was generated by quarantine requirements. As the months progress, this demand is being replaced by traditional business and leisure tourism, which is building ahead of the FIFA World Cup in November and December.
Overall, average daily rates increased marginally in May from QAR 496 to QAR 507; however, the 5-star sector recorded a fall from QAR 813 to QAR 686.
The most recent publication of hotel statistics by NTC (2021 Annual Report) showed that Qatar’s hotel room supply reached 29,386 by year-end, which reflected a 6% compound annual growth rate since 2015. By 2026, the overall supply of hotel keys is expected to reach 50,000.
Cushman and Wakefield expect up to 4,500 new hotel keys to be delivered to the market throughout 2022, with most targeting opening dates in Q3. This new supply, combined with existing hotel supply, and serviced apartment supply is expected to deliver approximately 37,000 keys, or 45,000 rooms for the World Cup. New supply has been relatively limited this year to date, with Le Royal Meridian being the most notable addition to the market in Q2.
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 five 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.