Browsing 'Business' News

Jameel Riaz / Flickr

Fireworks during the Qatar Shopping Festival

Urgent action must be taken to protect the future of tourism in Qatar, managers from several leading hotels in the country have said.

Speaking at the recent Hotelier Qatar Hospitality Summit, representatives from the Grand Hyatt, Intercontinental and the Four Seasons Doha all said that their hotels were experiencing a significant drop in business.

“It is clearly a down market,” Hotelier Middle East reported Four Seasons Doha general manager Todd Cilano as saying.

Thasleem MK/Flickr

Photo for illustrative purposes only.

He added that tackling the issue was a “community challenge, not an individual hotel challenge.”

Meanwhile, the general manager of the Intercontinental Doha stated that a destination marketing strategy must be devised “urgently.”

“Time and speed is of the essence,” Andreas Pfister said. “We need to be ready for the future. We need to plan today and get our act together for the next three to five years.”

By the numbers

The Qatar Tourism Authority has not released any visitor figures this year. The last official statistics it reported were in the third quarter of 2016, when it showed a year-on-year drop in visitors.

However, the government does keep track of hotel health.

Doha News

Average occupancy rates

According to the Ministry of Development and Planning Statistics (MDPS), hotel occupancy rates rose slightly from January to February of this year, the most recent data available.

But year-on-year, it only rose 3 percent for five-star hotels, while falling 4 percent for four-star hotels.

Doha News

Average room rates

Meanwhile, the more affordable three-star hotels saw occupancy jump 12 percent year-on-year since February 2016.

Still, the average room rate fell for all hotel types, down by QR60 to QR20/room.

Price cuts ‘not the answer’

Despite this trend, Cilano argued that hotels should not keep dropping their prices.

Four Seasons Hotel Doha/Facebook

Four Seasons Doha

Doing so would not increase tourism in the long run, he argued.

Cilano added that the Four Seasons was relying instead on the strength of its brand and its emphasis on quality – a strategy that he said has so far proven successful.

However, in a report last year, Colliers urged Qatar’s hospitality industry to slash room rates and offer more interesting dining options to attract guests during the ongoing economic slowdown.

Focus on food and drink

Investing in food and drink options as a way of generating more revenue is an idea that hotel managers appear to agree with.

Thomas Hawk/Flickr

Photo for illustrative purposes only.

Though room bookings are not rising much at luxury hotels, managers said that they were still experiencing growth at their bars and restaurants.

These are popular with Qatar’s residents as well as tourists.

Referring to F&B offerings, the Intercon’s Pfister said that trying to generate growth with only room sales would be “a struggle.”

He emphasized, however, the importance of continuing to deliver good service in a downturn, rather than just focusing on profits.

GCC tourists still key

During the hospitality conference, some managers discussed the demographics of Qatar’s visitors.

Reem Saad / Doha News

Photo for illustrative purposes only.

Some 46.1 percent of all visitors to Qatar last year came from other Gulf countries, according to TRI Consulting.

The QTA is hoping to change that, but Cilano said that plan is only a “medium-to-long term” goal.

“The conscious push to move away from GCC markets and attract more international visitors – that’s simply not happening right now. We’ve got to fish where the fish are and in the short term, they’re in the GCC,” he said.

He added that in order to attract tourists from countries like China, Qatar needs to up its game.

Mainland China

Photo for illustrative purposes only.

He suggested translating visa forms into Mandarin, hiring more people who speak the language, offering authentic Chinese food in hotels and malls and establishing a presence on the Chinese social network Wechat.

Last year, Qatar also announced plans to begin offering visas on arrival for people from China, as well as India and Russia.

Thoughts?

Qatar Airways/Flickr

Qatar Airways CEO Akbar Al Baker

The new laptop and tablet ban onboard flights heading to the US has hurt Qatar Airways’ business, its CEO admitted this week.

It also doesn’t actually make people safer, Akbar Al Baker told CNN.

The comments are a departure from remarks the official made late last month, when the ban was first introduced.

At the time, Al Baker said that the policy was simply a “security measure” that did not target Gulf airlines unfairly.

But now, he said that the measure is ineffective because it does not stop terrorists from carrying out attacks on planes that don’t have electronics bans.

“It was not necessary to frighten passengers and put a strain on airlines,” he told CNN, continuing:

“If (Trump) continues this way, at the end of the day you will have people sitting in the airplane with underwear and nothing (else) on them.”

US, UK restrictions

Since the end of March, electronic items larger than cell phones have not been permitted inside the cabin of aircraft flying to the US from 10 Middle Eastern cities, including Doha, Abu Dhabi and Dubai.

Instead, passengers must check their laptops, iPads and e-readers, among other devices. Nine airlines are affected by the ban, including Qatar Airways, Emirates, and Etihad.

HIA security

Brian Candy/Flickr

HIA security

No US carriers are on the list.

The UK has implemented a similar measure, but Gulf carriers are exempt from it.

When asked about the discrepancy, Al Baker told CNN that the US policy must have been “done in a hurry.”

He reiterated his support for President Donald Trump, someone he previously called a “friend,” but added the official must have been “ill-advised.”

Fewer passengers

To counter the ban, Qatar Airways has begun offering laptops to premium passengers. But Al Baker did admit that business has still been affected.

“Yes, we have had a drop in passengers, but it’s a manageable drop and people have started to realize that there are other ways to use laptops,” Al Baker said.

He added that each flight has seen perhaps 10 fewer passengers due to the ban. But because the airline flies to 10 US cities a day, the numbers must be adding up.

It is unclear how much longer the ban will be in place, though Emirates has previously expected it to last until at least this fall.

Thoughts?

nkhairil79/Flickr

Photo for illustrative purposes only.

Qatar is “well-positioned” to manage the impact that lower oil prices have had on its revenue, the International Monetary Fund (IMF) has said.

The country has taken the necessary first steps to handle new deficits by cutting expenditures and diversifying its economy, the IMF added in a recent assessment.

Though there is a risk of rising inflation and continued lower oil prices, the fund has expressed confidence in Qatar’s economic future.

IMF

Qatar: Selected Economic and Financial Indicators, 2013–2018

That said, it still forecast the cost of living (CPI) in Qatar to rise from 2.6 percent currently to 5.7 percent by 2018.

This is likely due to the upcoming rollout of two new taxes in Qatar, a value-added one and a selective tax on fast food, luxury goods and other items.

Recommendations

One indicator of Qatar’s economic health has been its GDP. It rose from 2.7 percent in 2016 to an expected 3.4 percent this year, thanks to investment in infrastructure projects.

To keep things running smoothly, the IMF offered several suggestions to authorities.

Reem Saad / Doha News

The price of petrol rose five months in a row before leveling off in April.

For example, it urged Qatar to continue its plans to cut subsidies, lower spending and roll out its new taxes.

The IMF also encouraged Qatar to do more to ensure it is efficiently managing its investments. And it suggested further transparency is needed when explaining the country’s fiscal position.

Other ideas included:

  • Enhancing anti-money laundering efforts to combat the financing of terrorism;
  • Strengthening banks by developing a more “active liquidity forecasting framework”; and
  • Improving Qatar’s business environment through labor market and education reform.

Thoughts?