Doha Prepares For Decade Of Travel Growth - Business Travel News

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Doha Prepares For Decade Of Travel Growth

March 29, 2012 - 03:50 PM ET

By Michael B. Baker

Doha, Qatar - Like many nearby cities in the United Arab Emirates, the skyline in the Qatari capital within a few decades has changed from flat sand to rows of skyscrapers and a mishmash of architectural styles. Doha is a hub for the natural gas business and a key destination for travelers in energy, medical and construction industries. While such neighbors as Dubai and Abu Dhabi have seen a build-up and subsequent plummeting of hotel rates, hoteliers said they expect Doha's pattern to be different thanks to growing group and leisure travel.

“We're very optimistic about this market in the long term,” said Marriott International's Middle East and Africa COO Mark Satterfield, who presided late last year over the opening of two connected towers containing Renaissance, Courtyard and Marriott Executive Apartments properties in the city. “We're sitting in a great location, a business and financial hub, and when you look at Doha and Qatar, they increasingly are the place to get business done in the Middle East.”

While the global economic downturn caused a bit of a drag in Qatar's hotel development for a few years, the pace has picked back up, said Sheikh Mohammed bin Faisal Al Thani, whose Faisal Holding is one of the largest developers in the region.

In the third quarter of 2011 alone, hoteliers added more than 6,000 rooms in Qatar, including 25 hotels and 10 hotel apartments. Despite the increase in supply, 2011 occupancy in the country remained relatively stable compared with the previous year, while average daily rates were up 7 percent, according to STR Global.

During the next decade, about 77 new hotels and 42 hotel apartments are expected to open. This includes a St. Regis, which opened in February; a Crowne Plaza, a Premier Inn and Hilton Garden Inn scheduled to open later this year; Shangri-La and Traders hotels opening in 2013; and new properties after that from Mandarin Oriental, Kempinski and Carlson Rezidor.

“People are not as confident as they were before, but over the past three years, and especially after the announcement that the World Cup was going to be in Qatar [in 2022], people were excited and got back to work,” Sheikh Faisal said. “Over the past 10 to 15 years, there consistently has been new projects, and that will continue at least until the World Cup.”

The massive influx of rooms should be good news to corporate travel buyers, who traditionally have not had to compete heavily with the leisure segment for rooms in Qatar. While Doha has a few tourist attractions—the I.M. Pei-designed Museum of Islamic Art, for example—it's not home to major holy sites like other spots in the Middle East, and its moderately conservative reputation has not given way to the playground reputation of Dubai.

Even so, 2011 corporate hotel rates increased year over year by 4.6 percent amid the global economic recovery, according to Business Travel News' 2012 Corporate Travel Index. The city was the third most expensive for corporate travel in the Middle East, behind Muscat, Oman, and Riyadh, Saudi Arabia.

Despite the supply growth, travel buyers soon could find increased competition for securing hotel rooms in Doha. Qatari tourism officials project the country's tourist arrivals to increase from current levels of about 900,000 annually to as much as 3.7 million by the time of the World Cup. The New Doha International Airport is scheduled to open this year after nearly a decade of planning work, vastly increasing flight capacity. The current Doha International Airport handled about 18.1 million travelers in 2011; the new airport will be able to handle about 24 million after its first phase of construction and up to 50 million upon its completion a few years later [see correction below].

The country's namesake carrier Qatar Airways, meanwhile, is adding new routes, including 12 last year and recently launched service to Baku, Azerbaijan and Tbilisi, Georgia. Additional routes planned for this year include Kigali, Rwanda; Zagreb, Croatia; Perth, Australia; Mombasa, Kenya; Zanzibar, Tanzania; Helsinki, Finland; and Gassim, Saudi Arabia.

Qatar also has been loosening some of the procedural entry requirements for foreign visitors, including visa-free entry for some residents of Gulf Cooperation Council countries and a growing list of countries—including the United States—from which residents can buy visas upon arrival at the airport in Doha.

The country also will be targeting group travel more aggressively after opening in December the Qatar National Convention Centre.

“Event [business] is stronger and growing, and Qatar's continuous effort to be in cultural and educational activities will drive this growth,” said Oliver Kahf, general manager of the three recently opened Marriott properties in Doha.

Correction: An earlier version of this report included incorrect figures regarding Doha International Airport's traffic.

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