The 2022 FIFA World Cup is about positioning Qatar on the world stage and learning from the mistakes of past host countries when it comes to infrastructure and inventory development.
This was the theme of yesterday’s panel on Exploring the world of hospitality real estate at the Cityscape Qatar Conference.
Moderated by Edd Brooks, General Manager at DTZ Qatar, the panel explored the impact of the upcoming FIFA World Cup on the hospitality sector in the country, looking at South Africa and Brazil – past FIFA host countries – as case studies.
According to experts on the panel, South Africa was left in a predicament after it invested in too much stock, and was left with an oversupply following the football event.
“Qatar will need to change the way they operate in order to rescue the market,” said Grant Salter, Director & Head of Travel, Deloitte. “When building, we need to look beyond 2022 and have flexibility in the design so it can adapt after the World Cup.”
“There has been a lot of analysis following past FIFA World Cup events and what we’ve learnt is that it’s not about football, in fact football is just a side-line event of the World Cup, it’s about positioning the country on a world stage and looking at past success case studies to find out how we can use the World Cup to benefit the country after 2022,” said Salter.
Salter added that South Africa built infrastructure, world class stadiums and hotels and are only reaping the fruit seven years later.
While Qatar is preparing for the upcoming 2022 FIFA World Cup, its tourism strategy embraces a far larger approach by looking beyond the World Cup to create a stable and diversified market post 2022, with the added objective of creating over 100,000 jobs.
According to DTZ, Qatar has obligations to provide more than 60,000 hotel rooms for the FIFA World Cup, however the quantity of stock in the pipeline has led to concerns of an oversupply within the sector, particularly in the 5-star category. Although, panellist Christoph Franzen, General Manager of the Grand Hyatt Group, said that there will be hotels in the 5-star segment operating under the price of 4-star hotels and 4-star hotels operating under the price of a 3-star hotel, adding that there will be agility in room rates.
Property consultant, DTZ believes that there is a silver lining and a unique opportunity for real estate investors. “Real estate investment opportunity in Qatar lies in the mid-range hotels, specifically 2-star and 3-star hotels. Currently there is a lack of these mid-range hotels in the country and for investors looking at the hospitality industry, there is a demand for this kind of product,” said Brooks, speaking to Cityscape.
Overall, investor sentiment towards the World Cup is positive. Kailash Nagdev, Managing Director at Yougov, told delegates at the Conference that the international football event is encouraging for investors and brokers.