November 4, 2021

Quarterly Report Qatar Q3 2021: Hospitality Market Overview

Room revenues increase in 2021, despite ongoing challenges presented by COVID-19

The performance of the hotel real estate sector in Qatar has
been impacted severely throughout the pandemic with the fall in
global tourism. According to the National Tourism Council’s
latest Tourism Performance Report, visitors to Qatar fell by 82%
between H1 2020 and H1 2021.

Following the lifting of the blockade in January, visitors from
Saudi Arabia and UAE have returned, albeit in low numbers
given the ongoing COVID-related travel restrictions. We expect
Saudi Arabia to regain its position as Qatar’s largest source
market as soon as international travel recovers.

Performance statistics throughout the pandemic have been
distorted by the removal of designated quarantine facilities from
the official supply. Excluding these rooms, Overall occupancy
rates, excluding rooms used for quarantine purposes, increased
by 7% y/y over the first six months of the year.

The increase in occupancy rates is also reflected in revenues,
with Average Daily Rates increasing by 16% and Revenues Per
Average Room up by 24% by the end of June. By June, average
ADRs throughout the hotel sector had increased to QAR 438

The supply of hotel keys in Qatar reached 29,688 by the end of
June 2021. This reflected a 7% y/y increase. Almost 1,400 hotel
keys were added to the market in the first six months of the year.
The increase in supply is below previous projections for 2020
and 2021, partially due to delays associated with the COVID-19
pandemic.

The most significant delivery in new supply over the past two
years has been hotel-apartments, which now comprise 8,020
keys – 27% of overall supply. 62% of hotel rooms (excluding
apartments) are classified as 5-star. A similar share of room
keys under development are also expected to be in
upscale/luxury establishments.

Based on projected supply for the FIFA World Cup in November
2022, Cushman and Wakefield expect in the region of 15,000
keys to be delivered in the next 12 months – representing an
unprecedented increase in the supply of hotel accommodation.
The sharp increase in supply is expected to put pressure on
occupancy rates post-World Cup; however, the profile afforded
by hosting the tournament, the development of significant
tourism infrastructure, the ending of the blockade, and a
rebound in global travel are all expected to underpin significant
growth in tourism to Qatar in the coming years.

 

Cushman & Wakefield Quarterly Report Qatar Q3 2021