Quarterly Report Qatar Q3 2020: Hospitality Market Overview
Despite the re-opening of hotels, performance remains affected by COVID-19 restrictions
Cushman and Wakefield estimate that by September 2020 the supply of hotel keys had increased to 28,249, up from 27,261 in December 2019. There are currently 134 registered hotel properties in Qatar, including hotel apartment buildings.
The COVID-19 pandemic has slowed the delivery of new hotel supply throughout this year. There are currently more than 20,000 rooms under construction, which will complete before the FIFA World Cup in November 2022. Given the recent delay in the delivery of anticipated new supply, we expect a significant increase in supply to reach the market in 2021.
The most recent figures released by the PSA show that hotel occupancy reduced to 51% in July from 64% in July 2019. Hotel occupancy has been impacted by the lack of business and leisure visitors in recent months. Several three and four-star hotels in Qatar have been utilised as quarantine facilities for residents returning to Qatar from abroad. The use of hotels as quarantine facilities has helped to support occupancy rates; however, in the longer term, the tourism sector will need to experience a robust recovery to maintain and boost occupancy rates.
According to the PSA, tourist arrivals in July showed a 54% decline on the same month in 2019, due to the enforced government restrictions on travel into Qatar. The Qatari government confirmed in September that quarantine measures would remain in place until the end of the year. It is unlikely that tourist arrivals will increase until a COVID-19 vaccine is found and made widely available, putting further pressure on hotel occupancy rates in the short term.
Hotel revenues have also been affected by the COVID-19 pandemic over recent months. Average daily rates (ADRs) for all hotels in Qatar in June was QAR 379, according to the PSA, with revenue per available room (RevPAR) down to QAR 194.
While the lack of international visitors has affected hotel performance, there has been an increase in domestic tourism, as Qatar’s residents’ have been unable to travel. Since hotels re-opened in Q2, beach-front hotels, in particular, have witnessed a sharp increase in ‘staycations’.
The hospitality sector’s recovery from the COVID-19 pandemic will be boosted by the delivery of several major tourism and leisure projects. The development of Salwa Beach Resort, Zulal Wellness Resort, Qetaifan Islands, Lusail, and Doha Oasis, as well as the redevelopment of Doha Port and regeneration of the historic city centre will all form part of Qatar’s tourism strategy to increase visitor numbers and help to boost occupancy rates and revenues in the hotel sector.
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