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Qatar FIFA World Cup bid win signals tourism sector windfall

Qatar: Tuesday, May 24 - 2011 @ 11:30

Approximately 400,000 tourists are expected to make the journey to Qatar for the 2022 World Cup, and that’s not including the vast hordes of guest workers who will be required to handle construction, services, and infrastructure requirements. As a result, the country’s hospitality and tourism sector will be forced into overdrive in an attempt to prepare Qatar for becoming the most talked-about place on the planet in summer 2022.

Qatar to provide seven World Cup host cities

Qatar’s bid book, submitted to and approved by FIFA, proposes that the World Cup will centre on seven ‘host cities’: Doha, Al-Rayyan, Al-Daayen, Umm Slal, Al-Khor, Al-Wakrah and Al-Shamal. Each will require considerable development of their accommodation facilities, although the fact that almost the entire population and five of the seven cities are within a 25km radius of the capital Doha, means much of the work will be focused in this area. In addition, ten of the 12 stadiums to be built for the event are located within 30km of Doha.

Qatar to expand 3, 4 star hotel offering

More than 84,000 hotel rooms have already been contracted, exceeding FIFA’s minimum requirement of 60,000. And according to local media reports in the wake of the 2022 announcement, Qatar will focus on building three and four-star hotels, to increase the total number of rooms available in the country to 90,000 by the time the World Cup kicks off – double the number of rooms available today. The country already boasts several five-star luxury hotels, and there is expected to be an effort to cater to spectators from different income groups visiting the country for the 2022 event, a promise which formed a key component of Qatar’s bid.

“Five-star inventory in Qatar will, in the most conservative of scenarios, increase by around 77% in the next five years,” says Catalin Cighi, associate director at hospitality consultancy HVS Dubai.

“However as the market matures, there will be more of a balance between midscale and upscale properties – we will still see the bulk of new hotels moving away from the four/five-star bracket, and towards the three/four-star bracket.”

Qatar Tourism Authority: hotel opening delays due to global economic crisis

Not that Qatar has enjoyed an unblemished run of late, when it comes to delivery of such projects. According to Ahmed Al Nuaimi, chairman of the Qatar Tourism Authority (QTA), there were delays in the delivery of some hotels scheduled for completion in 2010. He said in October last year that the country would fall short of its plan to deliver 42 new hotels in 2010; just 28 were expected to open by the end of year. Al Nuaimi blamed the delays on renegotiations with contractors as the result of price adjustments coming out of the global economic crisis. He maintained that no projects had been cancelled, and said that he expected around 40 new hotels to have opened by end-October 2011.

“Delays are a reality of the hotel market in the Middle East, for a whole host of reasons,” says Cighi. “In Qatar the main concern has been that although we all knew that things were going to happen, there were still questions relating to timelines.

“We know the Qataris have the vision and the money, but before the World Cup bid was won, there was some uncertainty regarding timelines and deadlines – especially related to large-scale developments such as Lusail,” he continues. “Now some of the uncertainty is gone and so some of the reasons for delays have been removed.”

Alternative accommodation to offset oversupply risk

There is also the opportunity for the development of alternative accommodation in Qatar, in order to mitigate against the risk of oversupply once the tournament has ended. Possible ideas include modular accommodation, whereby hotels could be disassembled after the event and donated elsewhere, and using vacant residential properties as serviced apartments. Most eye-catching is Qatar’s proposal to use a cruise ship to provide accommodation for about 6,000 football fans during the tournament. The ship will be moored near the town of Al-Wakrah, and it’s a trick Qatar has used before, with some success – during the Asian Games in 2006, three were used as tourist housing with a combined capacity of 2,500.

“Everything that can be moved and used in alternative ways, or in alternative locations, whether its modular hotels or cruise ships, would diminish the danger of oversupply,” says Cighi at HVS. “There’s real value in looking at these alternatives, because if one thing is certain, it’s very unlikely that demand will keep up fully with the type of supply increase Qatar has committed to deliver over the next ten years.”

Qatar Airways route expansion, New Doha Airport

In order to fill all these rooms, Qatar will be counting on its national carrier, Qatar Airways, as well as a new $10bn airport, dubbed the New Doha Airport. Qatar is well into construction on the first phase of the project, which will eventually replace the existing airport. The first phase is scheduled to open in late 2011 or early 2012, with later phases being rolled out between 2012 and 2027. Once completed, the new airport will have the capacity to cater to 24 million passengers a year – the majority of them carried by Qatar Airways, which is fast emerging as one of the world’s most ambitious airlines.

Qatar Airways this year launched its 100th route, and the carrier has already announced plans to take on an additional 3,500 staff annually across the group over the next three years. With 19,000 employees currently working for the airline and its units, the increase represents a more than 50% addition to the head count by 2014. And it comes as part of an ongoing recruitment drive fuelled by the airline’s expansion, which will see further new routes opening up later in 2011. According to the carrier, by 2013 it plans to serve more than 120 key business and leisure destinations worldwide, with a fleet of more than 120 aircraft.

Nor is the carrier’s ambition limited to opening new routes. The carrier’s chief executive, Akbar Al Baker, told reporters in March that Qatar Airways was eyeing acquisitions and could strike a deal before the end of the year. “It is very well possible that we will buy shares in another airline,” he said. “[The] precondition is that it has a strong network and can help us to become a more global actor.” While Al Baker declined to name any possible targets, he did admit that the carrier might be prepared to buy 49.9% of a European airline, the maximum level a foreign investor can obtain without additional conditions.

Al Baker’s bullish attitude will come as no surprise to seasoned watchers of the aviation game in the Gulf: last year, he issued a broadside at Western competitors and warned that as European carriers face restraints in growth, the focus of the industry is shifting to Asia and the Middle East. “World airline companies whether it be Air France, Lufthansa, British Airways or Air Canada, do not have the capacity or the capability to grow,” he argued. “The genie is out of the bottle. No-one can contain our global expansion.” As is becoming increasingly clear, he could have been speaking not just about his airline, but about Qatar itself.

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Tuesday, May 24- 2011 @ 11:30 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.

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