(MENAFN- The Peninsula) Despite the addition of several hundred new hotel rooms over the last one year, Qatar's hotel market occupancy rate is forecast to close at 66 percent in 2016, which is still higher compared to the occupancy rates in some GCC cities that are also heavy reliant on the corporate segment, a latest report on the local hospitality sector reported.
The market performance of serviced apartments have remained relatively stable showing strong resilience during tough times when compared to the hotel segment, according to a quarterly report titled: ‘Doha Q3 2016 Review' released yesterday by Colliers International, a leading global real estate services company.
The country has witnessed an influx of more than 1,500 keys over the last one year, primarily in the 5-star segment. However, no new supply was introduced into the Doha market in Q3 2016.
While significant supply is expected to enter the 5-star and 4-star segments over the next few years, delays are typically expected in Doha, which leaves more time for the market to absorb the new supply. Branded supply is expected to increase by a CAGR of 19 percent from 2016 to 2018. Providing an overview of the Qatar's hospitality sector market outlook, the report stated: 'The serviced apartments concept continues to evolve and appeal to a wider target audience. Its strong resilience and limited presence in the market will appeal to hospitality developers and investors.
'Doha Downtown is home to several key demand generators including the Corniche, Souq Waqif, Qatar National Museum and Msheireb downtown. The latter is currently undergoing a QR20m regeneration project to add retail, residential, museums and hotels to the area. In addition, the upcoming Doha metro, which is expected to be completed by 2020, will host several stations in the Downtown area the report added.
On the supply front, it said that the market currently is dominated by 5-star hotels. The announced future hotel supply contains a significant share of 4-star hotels amounting to 48 percent of the total pipeline, followed by the 5-star segment with a share of 44 percent.
Due to the economic slowdown, hotel projects in Doha have been delayed. This also had an effect on the timely delivery for current construction works in Downtown Doha, where 18 percent of future hotel supply has already seen a delay of approximately 2 years.
Commenting on the performance of hotel sector, the report noted that during the third quarter of the currently year (Q3 2016) saw a substantial drop in both occupancy and Average Daily Rate (ADR) resulting in a 25 percent decline in revenue per available room (RevPAR).
Transient corporate demand has declined during this period, mainly due to a decrease in corporate travel in the summer months. Thereby leading to many hotel operators to implement a volume based strategy. Overall RevPAR decline for the Downtown area is expected to be marginally lower than the overall Doha market.
The Msheireb project is expected to have a positive impact on the Downtown area, including a potential diversification of the client base. This could mitigate the risk of being too reliant on a single type of demand. The report also noted that once the upcoming Doha Metro operational, it is expected to facilitate easy access to places of interest such as Souq Waqif, the Corniche and the Qatar National Museum, increasing footfall significantly.
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