Quarterly Report Qatar Q4 2023: Hospitality Market Overview
Record tourist arrivals in 2023 provide encouragement, despite signs of oversupply
The National Tourism Councils latest report, covering the first half of 2023, confirmed that more than 2 million visitors arrived in Qatar in the first 6 months of the year. The largest contributor to tourist arrivals is Saudi Arabia, which constitutes 26% of all arrivals to the state.
The number of arrivals from January to June reflected an increase of 95% on pre-pandemic levels of 2019, and 48% on pre-blockade levels of 2017, providing encouraging signs of growth to support the hotel real estate sector in Qatar.
While tourist arrivals have increased significantly, occupancy rates fell from 58% in H1 2022 to 53%, due largely to an increase in hotel room supply over that period. Between June 2022 and June 2023, the supply of hotel rooms increased by 27% to 38,754. While the unprecedented increase in supply in the approach to the World Cup has put pressure on performance metrics, ADRs remained stable at QAR 425 for the first 6 months of the year.
Over the second half of the year, the PSA statistics showed that occupancy rates remained stable between 52% and 58% with a spike to 66% in October.
Overall Average Daily Rates softened to QAR 404 by November with RevPARs down to QAR 269. Average revenues for the year to November reflect an improvement on 2020 and 2021, although there was fall on 2022 figures – which were boosted by the World Cup.
Four Seasons Resort and Residences at The Pearl Island and Waldorf Astoria in West Bay opened their doors in Q4, adding new supply at the luxury end of the market. Other new hotels expected to open in the coming months include Andaz Doha, NH Collection Oasis Doha Hotel, Rixos Qetaifan North, and Rosewood Doha.
The delivery of new hotels over recent years has also resulted in a significant increase in the number of F&B outlets, which are a vital component in boosting hotel performance. The increased number of F&B establishments has increased competition in this subsector, putting further pressure on overall revenues.
Recent trends in the sector, coupled with additional pipeline supply, have seen a noticeable reduction in the number of people in Qatar looking to invest in or develop new hotel projects in 2023. This is likely to remain the case until a sustained growth in tourism and occupancy rates is evident to justify construction.
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