Qatar: hotels are a hot bet

06 October 1995

IT WILL be early in the next century before Qatar sees some returns from its huge capital investment in industries that use North Field gas. But in one sector, at least, the financial fruits of the industrialisation programme are already apparent. New business means business travellers, but Doha is short of places for them to sleep.

Since the end of the Kuwait crisis in 1991, the leading hotels of Doha have taken on a new lease of life. On the back of the increase in business activity, occupancy rates have almost doubled, to about 60 per cent, and investors are encouraged enough by the turnaround to be considering construction of the first new hotels in a decade.

Hotel beds are a hot commodity. When Doha plays host to a major international event - be it the annual tennis tournament or a more sombre occasion such as the liquefied natural gas (LNG) conference held last March - rooms are at a premium. Even senior government officials are affected. 'I have had to delay two GCC meetings this year, as I have had nowhere to put the participants,' Municipal Affairs & Agriculture Minister Sheikh Ahmed Bin Hamad al-Thani said in July. 'We are badly in need of more hotel space.'

Just how much extra capacity is required is a matter of some debate. At the top end of the market, there is a consensus that at least one new complex is justified. So far, two proposals have been presented as part of the West Bay lagoon development which is already under construction.

They are:

An island hotel. The government-owned Qatar National Hotels Company (QNHC) has already acquired a plot of land on the commercial side of the island. QNHC, owner of the existing Doha and Gulf Sheraton hotels, plans to build a 400-600 bed hotel, which it describes as a six-star facility. Subject to final government approval, construction is scheduled to start in 1996, once reclamation of the island by the US' Great Lakes Dredge & Dock Company is complete.

An onshore hotel. The private sector West Bay Hotels Company was set up last year to promote a $90 million project with the UK's Hilton International. Plans for this hotel complex, to be known as the Doha Hilton Palace, call for a 250-room hotel on a 55,000-square-metre site. The centrepiece of the development will be the hotel itself, which will have a six-storey atrium, topped by a dome. The project depends on the sponsors securing the necessary financing.

Efforts are also being made to upgrade the existing hotels. The most advanced scheme is at the Ramada Renaissance, where a consultant has been appointed to oversee a $11 million-13 million expansion and upgrade of the hotel.

Business and government visitors account for about 70 per cent of room nights at Doha's better hotels, according to a recent tourism survey by HVS International. Airline crews occupy around 20 per cent, while the remaining 10 per cent is taken by leisure and conference delegates.

With Doha pressing to develop its nascent tourism industry and expand its calendar of sporting events, officials also see some scope for hotel developments at the lower end of the market. 'We need something below five stars, possibly a three-star hotel complex beside the sea,' Sheikh Ahmed says. He believes that such a venture should be launched by local investors. Indeed, QNHC has already taken a lead. On 3 September, it officially opened a one-kilometre-long beach front resort at Umm Said and a palm island resort, close to the Doha Sheraton.

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