Doha, Qatar: Qatar has seen a significant growth in the hospitality sector evident by increase in tourist numbers.

Approximately 90 percent of hotel rooms in Qatar are classed as four star or five-star, with most apartments being classed as ‘deluxe’.

Hotel performance has been boosted somewhat in recent months by the increase in tourist numbers to Qatar. While third quarter (Q3) of this year was subject to the usual fall in arrivals due to the high summer temperatures, the official figures for the first six months of the years reflected a record number of tourists arriving in the State of Qatar, Cushman & Wakefield noted in its Q3 2024 Real Estate Market Review.

It noted, as the tourism sector grows, the pace of new hotel development has slowed after a decade of strong growth. Fewer than 1,000 hotel keys have been delivered over the past 12 months. This compares to an average of more than 2,800 keys per annum between 2014 and 2023. Total supply is now just shy of 40,000 keys including hotel rooms and hotel apartments.

More than 2.6 million people visited Qatar in the first half of 2024, which was an increase of 28 percent on the previous record of visitors during first half (H1) – achieved last year, according to National Planning Council (NPC).

Saudi Arabia remains Qatar’s largest source market for visitors for Qatar with 29 percent of overall arrivals. In total, 45 percent of visitors come from the GCC. India represents the second biggest market at 8 percent of total visitors.

The impact of increasing visitors and a relative slowdown in additional supply is reflected in the performance metrics this year. According to STR Global who compile international hospitality sector statistics, overall occupancy for the year to date (January-September) in Qatar is 66 percent, which is up from 53.7 percent in 2023. The ADR has increased from QR407 to QR431 over the same period.

The improved performance witnessed throughout Q1 and Q2 continued in Q3. Hotel occupancy for September 2024 was 63.4 percent, up from 57.7 percent in September 2023. Average Daily Rates in September increased from QR359 in 2023 to QR380 this year.

The improvement in hotel performance in 2024 is encouraging for the sector and illustrates the benefits of Qatar hosting an increasing number of international events, such as the Asian Cup, Formula 1, and Web Summit. Despite increasing revenues and occupancy, the market remains challenging and will require sustained government investment in the sector as Qatar looks to become established as an internationally recognised destination for leisure tourism and events.

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