The Beautiful Game

Qatar

Economic News

22 Jul 2010
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With the 17th Gulf Cup football championship due to kick off in Doha in just a few weeks time, Qatari businesses have been cashing in on the expected international draw. This is good news for Qatar Sports International (QSi), the marketing organisers, who have signed a rash of sponsorship and joint venture deals in recent weeks.



Featuring a line-up from Iraq for the first time in over a decade, the contest will see eight teams compete for the coveted trophy, with the final scheduled for December 24. Usually biannual, the cup is being given an all-new look this time. The Qataris are holding a special extra tournament, after the cup was held in Kuwait last year and after it was cancelled in 2002. After this year, the cup returns to its normal two-yearly schedule. Also making a difference this time is the addition of basketball, handball and volleyball competitions to the tournament.



As Khalifa al-Subaey, Executive Director of QSi, told the press on October 28, "Ramadan is proving to be a very good month for QSi." This was after he had inked an agreement with the Qatar Tourism Authority (QTA) under which the authority becomes a major event partner for the tournament. As al-Subaey also pointed out, QTA thus became QSi's third new partner in a week.



The day before, a deal had been struck with telecoms company Qtel, making it a "Platinum Partner", while the Abu Dhabi-based Etihad Airways had signed a similar deal a few days before.



For Etihad, this marks the first time that the company has moved into sports sponsorship and underscores the airline's ambitious expansion plans. Back in July, Etihad placed a huge order for 29 wide-bodied airliners, with an option on a further 12. By 2010, it aims to have a fleet of 50 aircraft serving around 70 destinations worldwide.



As for QTA, sponsoring sports events such as this is part of its strategy to develop Qatar as a leading international venue for competitive events. As QTA Acting CEO Jan Poul N. de Boer said at the signing ceremony, "Sport plays a very important role in our marketing efforts to attract visitors to Qatar. The Gulf Cup fits those efforts very well."



The Qatari National Olympic Committee (QNOC) established QSi as its own sports business directorate in 2003, while the committee itself remains the tournament organisers. The move came amidst growing interest by both Gulf and international companies in sponsoring sports events in the region. Often cited as a good example of this has been LG's sponsorship of the Iraqi national soccer team, with the hope that its exposure at the Gulf Cup will be good for the company's regional image. The tournament will be given live coverage by Qatar's al-Jazeera Sports TV, giving the matches potential audiences of around 300m people.



Another organisation that has seen the potential benefits here is the Qatari National Bank (QNB), whose Mohammed Marzouq al-Shamlan, a member of the bank's executive committee, told reporters on October 31 that "The Arabian Gulf Cup has always been the most popular sporting event here in Qatar and in all GCC countries." He was speaking after QNB had also become an event advertising partner.



In many ways, the Gulf Cup also comes as a forerunner of the 2006 Asian Games, which will also be held in Doha. Companies will be looking too to see how this year's competition runs and what sort of coverage it gets in deciding their marketing strategies for the much bigger later event.



It is also beyond doubt that such events have a major knock on effect in the local economy. Qatar's construction boom has been given extra lift by the season of sporting tournaments ahead, with a rash of major hotel and leisure projects currently building. The Gulf Cup is also projected to see an inrush of visitors to Qatar from neighbouring countries, explaining the interest of airlines in sponsorship deals, as well as the enthusiasm of the local hotel sector.



Yet these booms have had a down side in some areas. In particular, as a report released this week showed, inflation has begun to look more troublesome. Qatari Central Bank (QCB) figures from October 25 showed the general price index had risen 5.7% between December 2003 and June 2004, significantly up on the 2.3% recorded over the same period the previous year.



A significant factor also revealed by the QNB was that the cost of living in Doha has risen steeply, with a 20.9% increase in rental rates recorded since 2001. Partly this is due to a booming population, yet is also a result of this going in tandem with bottlenecks in construction and increasing pressure on existing housing stock. New apartments are being built, but often for the high end of the market, while lower end accommodation gets pushed further and further out of the capital. Available building land is also now dominated by contracts to build hotels and sports complexes.



"Life here is becoming more expensive," Hasan al-Emadi, director of statistics department at the Qatari Planning Council, told Gulf News on October 26. "The increase in rents, for example, is an indicator of the rising inflation and pressure on consumers. Prices have gone up even more this year."



Nevertheless, for Qatari and international companies, the sports boom is proving good business, while many of the facilities constructed are also likely to enhance the standards of living of Qataris too, as they boost the overall infrastructure of the country.



As for the Gulf Cup standings, currently, the Iraqi team is being widely tipped for the final after their strong performance at this year's Olympics. As for Qatar, it will doubtless be looking to improve on its current international performance - six points from five matches in the Asian Zone qualifiers for the 2006 World Cup.

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