February 5, 2022

Quarterly Report Qatar Q4 2021: Hospitality Market Overview

Hotel supply in approaches 30,000 keys, with significant new supply expected in 2022

The number of hotel keys in Qatar approached 30,000 in Q4 2021. The Steigenberger Hotel and Zulal Wellness Resort have been two notable arrivals to the market in recent months. The latest official figures from National Tourism Council indicate that there were 7,523 hotel apartments In December 2021 – an 11% year on year increase in this type of accommodation.

The existing supply of hotel keys, coupled with serviced apartments, now provide 38,674 rooms. This is expected to
increase to 45,000 rooms by Q3 2022 – in time for the FIFA World Cup. The overall development pipeline is expected to see the hotel supply in Qatar increase to more than 50,000 hotel keys within the next five years.

In December, Hyatt Plaza announced the upcoming opening of Andaz brand in West Bay in 2022. Other prominent brands that will open in Qatar include The Waldorf Astoria (in both West Bay and Lusail), The Chedi at Katara, The Plaza in central Doha, and Rixos at Qetaifan Islands. We understand that 15 hotels are currently under construction in Lusail.

In October, it was confirmed that Accor hotel group have signed an agreement to manage up to 60,000 rooms in private residences, which will be used supplement hotel accommodation for tourists visiting Qatar for the FIFA World Cup.

The performance of the hotel sector has been impacted severely throughout the pandemic due to a collapse in global tourism, business travel, exhibitions, conferences, and social functions. Arrivals to Qatar fell by 52% in the year to September, although this significant drop is largely down to the strong pre-pandemic performance in the early months of 2020.

After a gap of three years, the restoration of ties with Saudi Arabia and UAE resulted in both countries featuring in Qatar’s top 10 source markets for tourism. Once COVID-19 restrictions ease, we expect Saudi Arabia to restore its position as Qatar’s main source of international visitors.

Hotel performance metrics over the past 21 months have been skewed by the designation of approximately 60 hotels as quarantine facilities. Cushman and Wakefield understand that more than 30% of hotel keys were utilized as quarantine facilities at the height of the COVID-19 outbreak.

In the most recent Tourism Performance Summary by the National Tourism Council, occupancy rates in ‘available’ hotel rooms in Qatar increased from 54% to 62% y/y between January and September. Average Daily rates over the same period increased by 13% – reflecting an annual increase in Revenue Per Available Room of 29%.

Cushman & Wakefield Quarterly Report Qatar Q4 2021