Qatar visitor arrivals from Gulf neighbors drop 18% in 7 months

Moody’s downgraded the outlook on Qatar’s rating to negative from stable in July, saying that ‘the dispute has severely impacted trade, tourism and banking in Qatar.’ (Reuters)

DUBAI: Qatar’s hospitality sector continues to record weak performance, as visitor arrivals from the Gulf Cooperation Council and other Arab countries continues to fall as the Gulf diplomatic crisis enters its fourth month.
Qatar recorded a drop of 18 percent in visitor numbers from its neighbor countries in the first seven months of 2017 to 656,681 compared with 804,875 during the same period last year, according to data released by the Ministry of Development Planning and Statistics.
The diplomatic crisis seems to have also impacted visitor arrivals from other Arab countries as a nine percent decline was recorded during the period.
However, in the first half of the year, Qatar registered 10 percent growth in visitor arrivals from Europe and the Americas, over the corresponding period in 2016.
The increase in arrivals can be attributed to the government waiving visa requirements for 80 nationalities and the launch of an online visa application service for all nationalities.
Qatar, with financial reserves of $340 billion (SR1.27 trillion), has been supporting its economy through the infusion of capital, which, according to a Moody’s estimate, was around $40 billion in the first two months of the conflict with its neighbors.
The ratings agency has changed the outlook on Qatar’s rating to negative from stable in July, saying that ‘the dispute has severely impacted trade, tourism and banking in Qatar, and increased the country’s financing costs’.
Acknowledging this for the first time, the Qatar Tourism Authority in its latest tourism report said: “May and June saw a drop in arrivals, partly due to slowdown typically seen during Ramadan, which this year fell between May 25 and June 24, and as a result of the regional diplomatic dispute, with large falls in arrivals from GCC and other Arab countries.”
“Undoubtedly, the diplomatic dispute with three neighboring countries has had a negative impact on visitor arrivals during the summer months, rendering them slower than usual,” Hassan Al-Ibrahim, the agency’s chief tourism development officer noted in the report.
Qatar is facing a demand-supply mismatch in the hospitality industry in the run up to the 2022 World Cup. The country saw the opening of three new properties in the first half of 2017, adding 1,244 new rooms and bringing the total number of rooms available in Qatar to 24,460 across 123 properties, according to hospitality consultancy firm STR.
STR’s July pipeline database shows eight hotel projects in Qatar set to open by the end of 2017.
“These additional 1,669 rooms represent a 6.8 percent growth on top of the country’s existing supply,” an STR analyst.
Qatar’s hotel sector is expected to see continuous development in tourism infrastructure, with additional hotels and serviced apartments as the country gears up for the 2022 World Cup. A number of hotel and retail projects are being developed across the country, with the country’s Lusail area seeing increased activity of late.