Qatar’s hospitality sector is currently being affected by the drop in oil prices and depreciation in currency, although its long-term outlook remains strong and robust.
The Managing Director of Alpen Capital Investment Bank (Qatar), Sanjay Bhatia, explained that in the next five years, the hospitality market of Qatar is expected to demonstrate one of the fastest annualised growth of over 10 per cent, owing mainly to tourism-related developments ahead of landmark events to be held in the country, as reported by the country.
He pointed out that the upcoming events in the country, robust fundamentals and government efforts, will drive the continual rise in tourist arrivals, in addition to the opening of several new hotels and serviced apartments in the future.
Bhatia added that Qatar hospitality industry, which is backed by an active tourism market, remains firm on its growth trajectory and that the country continues to attract several tourists to its sport events, shopping festivals, and events of the same kind.
He stated that from an estimated $900 million in 2015, the Qatari hospitality sector revenue is expected to expand at a 12.9 per cent compound annual growth rate (CAGR) to reach $ 1.6 billion in 2020, reports Qatar Tribune.
According to Bhatia, the FIFA World Cup 2022 will be one of the primary reasons of the rapid growth of the hospitality sector in the region.
Moreover, he said that rooms supply is expected to grow at a CAGR of 12.5 per cent from 2015 to 2020, representing an addition of nearly 17,000 keys . In fact, international tourist arrivals are anticipated to increase at an annual average of 7 per cent.
He however warned that a faster increase in supply than demand is likely to maintain pressure on occupancy rates in hotels and serviced apartments and overall.
Pointing out on the challenges facing the hospitality sector, Bhatia noted that a weak economic activity has reduced spending on business travel and MICE events, which has further been impacted by liquidity and extended working capital cycle.
He believed that the hospitality sector is set to witness a notable growth thereafter in the wake of new business opportunities, mega international events and development of world-class tourist attractions.