A Platform for Tourism

Qatar

Economic News

22 Jul 2010
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Qatar is making steady progress towards its goal of becoming a major player in the Middle East's tourism industry, with the sector well placed to ride out the current global economic crisis and be ready to take advantage of any upturn in fortunes.

The state has set itself a target of attracting at least 1.4m visitors by 2010, having first broken through the 1m barrier in 2006. In 2007 it improved on this total, with 1.2m arrivals. Further projections foresee a doubling of the sector's contribution to GDP by 2012, with its present level of around $6bn rising to $12bn.

To cater to this increased visitor flow and generate the hoped-for rise in earnings, Qatar has embarked on a large-scale infrastructure programme, accompanied by a surge in hotel construction. A new $11bn airport is being built outside Doha that will be able to handle around 50m passengers a year when completed in 2015.

As an interim measure the existing international airport is being upgraded to enable it to process 12m passengers a year. While most of the passengers are in transit, Qatar hopes to entice a larger number to make the country a stopover, if not their final destination. Hotel room numbers are also set to jump, with projects already approved raising the total from the 2007 level of 7000 to some 26,000 by 2012.

But numbers are not everything. While there is increasing competition in the Gulf's tourism industry, with an apparently ever-widening array of luxury hotels, glittering resorts, theme parks and events geared to attract visitors, Qatar is taking a more measured approach.

Though the country has its fair share of resorts and accommodation, it has adopted a policy of balancing quantity with quality, aiming at the upper end of the market and capturing a strong portion of the lucrative meetings, incentives, conferencing and exhibitions (MICE) trade in the region.

According to Ahmed Al Nuaimi, the chairman of the Qatar Tourism and Exhibitions Authority (QTEA), the state body tasked with promoting and developing the country's tourism industry, the combination of business tourism and leisure has helped create a new pillar for the economy.

"We are already a centre for business and the MICE industry," Al Nuaimi told a tourism conference in Berlin on March 11. "We have built our infrastructure to support a very specific demographic, namely business-focused tourism and high-end leisure tourism."

The policy appears to be paying off, with 95% of all visitors arriving in Qatar coming on business-related trips, according to QTEA figures released this month. Last year, Qatar hosted more than 120 international conferences and exhibitions, a figure it hopes to maintain or even build on in 2009 despite the global economic downturn.

Qatar has also been careful to identify and preserve what is unique about the country so as to protect its charm and character, and thus its appeal to visitors.

"We are not looking to attract mass tourism, but rather a specific niche within the market," Al Nuaimi told the Berlin conference. "Catering to every tourism demographic would force us to lose our identity. But tourism in Qatar is not just about entertainment. We are dedicated to sharing our culture with our guests."

Success in tourism depends to a great extent on the health of the international economy. This is particularly the case in the MICE segment, with companies cutting back on travel and promotion-related expenses in difficult times.

The tourism industry across the Middle East and North Africa can expect a fall in demand this year, with pressure on operators to lower prices, according to the results of a study by MKG Hospitality in early March.

Though Qatar topped the rankings for the highest revenue per available room, with $223 last year, and had solid occupancy rates throughout 2008, this could change as the global economy cools.

"However much the sector has held up in 2008, and indeed it has resisted the downturn far better than other industries, the economic downturn will start to take its toll in the coming months as consumers and companies continue to cut back on travelling expenses," said Vanguelis Panayotis, the director of development at MKG Hospitality, in a statement accompanying the report.

An advantage Qatar does have over its neighbours is the strength of its economy. Although GDP growth is predicted to slow to around 8.5% this year, according to Standard Chartered Bank, the rate of economic expansion is higher than in any of the other Gulf states.

This continued growth means funds will remain available for major infrastructure projects and for developments necessary to support the tourism sector. This is not the case in many other countries in the region, where some projects have been put on hold.

Qatar may well see a downturn in tourism this year but, thanks to the health of its economy, the state should be able to sustain investment in the sector, thus securing ongoing growth in the future.

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