BTN's 2009 Corporate Travel Index: Demand Driving Doha Luxury Hotel Builds, Rates

Unlike Dubai, farther down the Gulf, Qatar has no "six-star" or "seven-star" hotels. However, there is no shortage of luxury accommodation in Doha, the capital of this tiny but oil-wealthy peninsula state attached to the eastern coastline of Saudi Arabia. The Qatari government has decided against inflation of the star rating scheme, which it regards as over-hyping of the hotel market.

In fact, the main problem travel buyers will encounter with the range of accommodation in Doha is not at the five-star end, where there are around a dozen properties from which to choose. These will be joined in March by Starwood's W brand and later in the year by a Grand Hyatt. There is also a smattering of four-star hotels, but in a city where 95 percent of visitors are corporate travelers, there is almost nothing in the three-star category or lower.

The lack of anything approaching budget accommodation is one reason why average rates in Doha are extremely high. What is more, prices continue to accelerate, with double-digit inflation a fact of life during the past six years. As with most Gulf states, demand has soared, thanks in part to aggressive expansion on the part of national airline Qatar Airways. Numerous new hotels have opened in consequence, but the increased supply of beds has not kept pace with the growth in visitors. This contrasts with Dubai, where a manic spree of hotel building led to overcapacity and rate deflation in 2008, according to travel management company HRG's annual hotel survey, published in January.

One other critical factor affects negotiated rates in Doha, as Philip Carlisle, chief executive of the United Kingdom's Guild of Travel Management Companies, discovered when organizing a conference there. "There was a good selection of hotels for a conference of our size—we were not just stuck with one," he said. "However, most of the hotels are government-owned or financed, which means you encounter a consistency of response to negotiations. One hotel is not likely to undercut another."

This problem aside, Carlisle's experience of organizing a conference in Doha was generally a positive one, including flowing traffic on the roads—again, unlike Dubai—and good-quality destination management companies and ground handlers. The only other challenge was organizing events outside the city's hotels.

"It is worth remembering you will have a problem serving alcohol if you choose a conference venue not in a hotel," said Carlisle. "In fact, finding venues for entertaining large numbers outside hotels was difficult generally."

What holds true for conferences also holds true for transient travelers when it comes to dining in Doha. Along with the city's private clubs, restaurants are the only establishments that serve alcohol with their food—and it is worth remembering that Qatar is completely dry during Ramadan.

Partly because of the drinking, most business dining in Doha is done in hotels, but the hotel restaurants are equally popular with locals as with visitors. Every hotel has a restaurant serving Lebanese food, and most also have one specializing in a particular Western cuisine. For example, diners can go Italian at the Four Seasons or Ritz-Carlton, or even Tex-Mex at the InterContinental or Marriott.

For those wanting to break loose from their hotel surroundings, the Balhambar restaurant is a good choice for two reasons: It serves Qatari food, which majors in lightly spiced fish and lamb, and it is located on the Corniche, the distinctive circular bay that dominates the topography of Doha and is the most popular spot in the city for evening strollers. Another option for visitors if they are not entertaining clients is a decent selection of excellent, though not luxurious, Indian restaurants, such as the vegetarian Garden on Al Kharaba Street.