Written by MANAR AL-JAMAL
Despite a forecasted rebound in Qatar’s hotel room prices, rates continue to fall, according to a Qatar Tourism Authority report.
Last year PriceWaterhouseCoopers predicted a slight uptick in 2015 hotel prices in the country, but Qatar’s 2015 Annual Tourism Performance Report indicated average daily rates slid a further six percent, meaning prices have declined for six consecutive years.
Local officials say an end to the price decline may not be near.
“Room prices are expected to fall more, especially with 39 new hotel establishments opening in 2016 and 2017,” Riham ElHoushi, account director at Qatar Tourism Authority, said.
Qatar’s five-star hotels saw an eight percent decline in average room rates last year, from $213 to $197, according to figures from the Ministry of Development Planning and Statistics. A deluxe room at Doha’s Intercontinental in West Bay, for instance, costs $240, though a similar room goes for $299 in Dubai and $318 in Riyadh.
Qatar Tourism Authority reported a 13 percent decline in rates at four-star hotels, properties like Crowne Plaza on Airport Road and K108 Hotel next to Souq Waqif. K108 will negotiate prices with guests on arrival, and sometimes drops rates by as much as 30 percent, Raja Khauldon, a concierge at the hotel, said.
The struggling energy industry may have contributed to falling room rates, according to Olga Zuck, sales manager at Grand Hyatt Doha. She said room rates have been falling drastically since she started working in Doha in 2013, when Grand Hyatt rooms were roughly 20 percent more expensive.
“The drop of both rates and demand started mid-2015 amid the oil crisis,” she said.
Falling oil prices affect business travelers in the energy sector.
“There is a concern that oil prices might decrease oil business-related travel,” ElHoushi said.
Some hotels are already encountering lower demand from business travelers, Christoph Franzen, general manager at Grand Hyatt Doha, said.
“There are less long- term guests due to savings by companies in the oil and gas business.”
Qatar may also be funding fewer international conferences and exhibitions due to budget cuts.
“Less conferences and events due to governmental budget cuts induce less [fewer] international travelers and business trades,” Zuck said.
Some hospitality analysts think low hotel rates do not have an impact on the country’s tourism, because most travelers who rent accommodations in Doha come for business purposes and are not likely to dramatically adjust their plans based on cost.
“I don’t think the low hotel room prices affect tourism in Qatar because most of the guests in hotels are business tourists,” Girish Nair, International Hospitality Management program leader at Stenden University Qatar, said.
Tourism competition in the Arab region may also reduce room rates, according to Emma Buckley, director of revenue at Four Seasons Hotel Doha, who said hotels are lowering room rates to lure guests away from Dubai. A deluxe room from Buckley’s employer costs $357, but $463 at the Four Seasons in Dubai. The local tourism market is not leisure-driven such as Dubai, which is why hotel room prices in Qatar are some of the cheapest in the Middle East, she said.
Yet the country still manages to entice some leisure travelers. Qatar hotels are offering attractive prices to host more tourists, especially from Saudi Arabia, Franzen said.
“I usually stay with my Qatari cousins when I visit Doha but when I found out that hotels here are very cheap I decided to stay at the Four Seasons,” Manal Al Mushiri, 18, a college student and frequent visitor from Saudi Arabia, said.
The weak Euro may also have lowered demand at Qatar hotels, which are more expensive for Europeans since the Qatari Riyal is pegged to the currently strong U.S. dollar, Nair said.
Hotels will need to be more cautious with costs in the next couple of years, Buckley said.
“Hotels should prepare themselves to reduce and save costs in order to cope with the falling oil prices.”
