Why Doha can expect hotel room growth in 2016

Doha, Qatar

A new report by real estate advisory company Colliers International suggests that the total number of hotel and serviced apartment rooms in Doha will reach 23,000 by the end of this year. Of that number, traditional hotel rooms are poised to increase by 25 percent to 19,726.

Currently, Qatar has close to 18,100 hotel and serviced apartment rooms, adding 1,460 rooms in 2015, said Filippo Sona, director, head of hotels MENA Region, Colliers International. The number is expected to grow by a further 27 percent by the end of this year, he added, thanks in part to some delayed openings originally slated for last year.

The growth can be attributed to the limited presence of midscale hotels and serviced apartments in Doha, presenting new development opportunities and offering owners and investors a niche to fill. For example, the Msheireb Downtown Regeneration project is expected to add 655 rooms in 2016. Several branded hotels have already opened their doors in recent months, Doha News noted, including the Westin. Others—such as the Mandarin Oriental, M Gallery and Park Hyatt in Msheireb Downtown Doha—are slated to open later this year.

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Doha can expect to see continued slow growth in corporate demand due to a slump in oil prices and slowing economic activity. Doha’s hotel RevPAR is expected to drop by 4 percent in 2016, but Hotelier Middle East expects supply to grow at a CAGR of 9 percent in the country.

But some of this development may be a bit premature: Industry insiders are suggesting that the race to construct new hotels and serviced apartments ahead of the 2022 World Cup may leave Qatar with a large oversupply of hotel rooms in the years before and directly after the football tournament.

“We’re not building specifically for the World Cup,” Christopher Knable, COO of Katara Hospitality, which owns Qatar’s Ritz-Carlton, the Sheraton Doha and Sharq Village and Spa, said. “It’s not about one specific event. It’s about building a diversified and attractive tourism destination.”

 

Sources: Doha News, Hotelier Middle East, Trade Arabia

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