Doha runs the risk of overbuilding: Colliers

Colliers International Hospitality has published a report on the state of the hotel business in the busy growth market of Qatar.

Not unlike the trends in other emerging markets, Colliers stressed that the leading Qatar market, Doha, is currently facing the risk of oversupply as the market gears up for the FIFA World Cup 2022. The city’s hotels are finding it increasingly difficult to maintain a stable RevPAR as the incoming supply is putting downward pressure on market-wide rates.

Colliers added that the announced forthcoming supply of hotels primarily consists of luxury/upscale properties, widening the existing gap in the market for midscale and economy hotels.

Among the other findings:

  • Corporate tourism is the primary driver for hotel demand in Doha accounting for 65% of total demand, while MICE is the second largest segment with a 8% share.
  • Qatar is expected to receive 3.5 million international tourists for the FIFA World Cup in 2022. The government is developing the country’s leisure offerings with projects such as Lusail and Katara, which are expected to increase leisure visitation.
  • Occupancy levels in the 5-star segment decreased by 6.8% in 2012 from the previous year, while 3- and 4-star hotels witnessed steady occupancy growth of 1.4% and 6.3% respectively during the same period, surpassing Qatar’s market wide occupancy.
  • Doha’s hotel market achieved an average room rate of QAR 843 (US$231) YTD Q3 2013, making it one of the highest in the Middle East, predominately due to the large supply of 5-star hotels located in the city.