This year’s World Cup will be the most expensive FIFA tournament in history, costing $220 billion, almost 20 times what Russia spent in 2018.
Qatar is expected to witness an economic downturn after the financially overbearing 2022 FIFA World Cup, according to a new report by S&P Global Ratings.
“Oversupply in the hospitality and real estate sectors could somewhat moderate their performance, although we don’t expect this to materially affect banking sector asset quality,” analysts wrote in the report.
As more than a million tourists arrive, Qatar will experience “a potential near-term economic gains” and the logistical difficulties of holding such an event will be brought to light. This will benefit neighbouring Gulf nations, according to S&P.
“We expect Dubai to be the main beneficiary outside of Qatar, given its geographical proximity and its already well-established tourism offering, airline connections, and multiple-entry tourist visas for World Cup ticket holders,” it said, according to reports.
Multiple entry ways are set to appear for the United Arab Emirates’ economic benefits, whether through daily flights or accommodation during the World Cup 2022.
The World Cup in the Middle East is seen as means of further generating regional tourism as approximately 1.5 million fans are expected to visit the host country.
A million World Cup supporters are also expected to visit Dubai, according to the Dubai Sports Council.
Due to the tournament, fans will flood the UAE, particularly Dubai, causing an unparalleled boom in tourism, especially since the country is less than two hours away by a plane ride.
Qatar Airways along with other Gulf airlines agreed in May to launch match day shuttle flights between Doha and several regional cities. This came following the signing of a new memorandum of understanding between carriers of the Gulf Cooperation Council.
This means football fans within the region will not have to stay in Qatar to attend football matches as daily flights will allow for easy on-the-day transport. There will also be a no check-in baggage policy to ease journeys.
FlyDubai will operate 30 daily return flights between Dubai and Doha.
As for accommodation during the tournament, property owners in Dubai are reportedly shifting to short-term rentals rather than the usual annual leases in preparation for fans flocking to the region for the World Cup.
This year’s increase will range between 15%-to-25% by December, in comparison to current rates, market sources told Gulf News.
Residential rents in Dubai have already witnessed an increase of more than 20% throughout the fiscal year ending in July.
World Cup prosperity
Despite the latest reports, analysts believe the World Cup 2022 is expected to have a major economic impact on the Gulf country, enabling the tourism sector to flourish as Doha doubles in size.
Qatar was recently ranked as the richest Arab country and the fourth wealthiest worldwide, as per findings by the Global Finance.
“The per-capita GDP of a Qatari citizen was over $143,222 in 2014, it was ‘just’ $97,846 a year later, and to this day it remains barely above that level,” read the report.
The Gulf state was followed by the UAE, Bahrain, Saudi Arabia, Kuwait, and Oman. Qatar’s ranking comes as its economy continues its post-pandemic recovery, described as “the fastest growing economy” by the World Bank.
The country’s real Gross Domestic Product (GDP) is expected to increase by 4.9% this year, followed by a 4.5% growth in 2023 and 4.4% rise in the year 2024.
“Still, the country’s oil, gas and petrochemical reserves are so large, and its population so small—just 2.8 million—that this marvel of ultramodern architecture, luxury shopping malls and fine cuisine has managed to top the list of the world’s richest nations for 20 years,” said the Global Finance.
That report said Qatar’s economic growth will also be the fastest in comparison to other GCC states throughout the years 2023 and 2024.
Meanwhile, the Gulf state’s leader Sheikh Tamim bin Hamad Al Thani said his country has been introducing legislative amendments to encourage commercial transactions, enhance competition, and ensure consumer protection.
One such development includes allowing 100% foreign investors ownership of companies, which in turn has “led to a significant increase in the volume of domestic and foreign investment”.
Foreign direct investment increased by 27% in 2021 in comparison to 2020, said Sheikh Tamim.
Still on the topic, Doha says it is to invest $45 billion in tourism after the World Cup and hopes to nearly double the sector’s GDP contribution over the next 16 years.
After the major sporting event concludes in December, the sharp increase in supply is predicted to put downward pressure on occupancy rates.
However, the elevated profile provided by hosting the event, development of significant tourism infrastructure, lifting of the blockade and global travel recovery are all expected to support the growth prospects of the tourism sector in Qatar.