Moving too fast?

The new Hotel Inter-Continental Doha, which received its first guests in October 2000, was the first of Qatar's much vaunted new generation of hotels to open.

The 268-room luxury property next to the Doha Golf Club is also the first to be established in the new West Bay area of the capital, Doha's carefully-planned, maritime-flavoured future upmarket business and diplomatic suburb.

Owned by the Gulf Hotels Company, the nine-storey hotel boasts a 38-room club floor, five restaurants, four meeting/banquet rooms accommodating up to 1,280 guests, a 400-metre-long private beach, a health club and extensive outdoor sports facilities.

A second phase of development at the site is planned to offer a further 166 two- and three-bedroom chalets. The hotel significantly also represents Inter.Continental's 100th destination, and is Bass Hotels & Resorts' 116th property in the Middle East and Africa region.

The next hotel to open in West Bay (late in 2001) will be the stunning Ritz-Carlton Doha, a 374-room upper upscale resort owned by the Qatar National Hotels Company (QNHC). The Ritz-Carlton will offer 61 suites, a club floor, eight food and beverage outlets, 2,000 sq m of meeting/banquet space (a ballroom plus seven meeting rooms), a full-service health club and spa, a large beach and a 200-berth marina. An unusual feature will be an adjacent seven-acre water park.

Another confirmed future hotel is the 136-room Holiday Inn Doha, due to open in central Doha by the summer of 2001. Between them, these three new hotels will add 778 rooms to a total existing hotel stock (pre-Inter.Continental) of 1,476 rooms - an increase of 53 per cent. With the exception of QNHC's Sealine Beach resort, which opened in 1995, this stock had remained virtually static since 1982.

Occupancies increased from around 35 per cent in 1990 to just over 60 per cent in the last few years thanks to the liquid natural gas (LNG) developments in Ras Laffan, and the beneficial knock-on effect of anticipated gas export income into the Qatari economy. But can Qatar attract the necessary increased demand to sustain its new hotels?

QNHC, the de facto tourism promotion board for Qatar, and its Qatar Holidays wing, together with independent tour companies like Arabian Adventures and Orient Tours, have been slowly building awareness of Qatar as a tour destination. Arrivals at Doha International Airport, now due for expansion, topped one million in 1997 and hotel guests totalled 333,379 in the same year.

The desert emirate runs a number of high-profile sporting events (tennis, football, regattas, rallies, equestrian trials), as well as business conferences and exhibitions. The recent Organisation of Islamic Conference (OIC) summit and the Milipol military and police exhibition are examples. The country is now looking forward to hosting the 2006 Asian Games, the second largest games in the world after the Olympics, and has promised to spend $1 billion on new facilities. Both the Ritz-Carlton and the Inter-Continental are putting their faith in the growth potential of the Mice (meetings, conferences, incentives and exhibitions) market segment in Qatar.

But will these modest foundations be enough to support future hotel growth? Banks and their risk managers have been asking this question in relation to a number of other plans for hotels in Doha. The fact that some of these are currently gathering dust in architects' offices is a clear answer.

A 224-room, five-star-plus Four Seasons hotel, also in the West Bay, has been on hold pending confirmation of funding for several years now. Originally planned for completion this year, the hotel is to offer six food and beverage outlets and 1,875 sq m of meeting space.

No operator has yet been found for another five-star hotel, now planned to form a subsequent phase of the City Centre Doha shopping mall, near the Sheraton Doha. Also, Hyatt, and Rotana have put their plans for future properties in Doha on ice.

In the meanwhile, the existing top hotels in the capital have had time to refurbish, in order to give newcomers a harder fight when they attempt to penetrate the market. The Ramada, Sofitel and most notably, the Doha Marriott, have each invested in major upgrading projects. The latter has completely transformed the old tower that was the 'budget' wing in the days of the Sheraton Gulf, by adding a sleek new mirror glass exterior, and 212 state-of-the-art rooms, all featuring the latest Internet and other technology.

Following a major study into tourism investment opportunities two years ago by TRI Hospitality Consulting, QNHC, which also owns the Sheraton, Marriott and Sealine Beach hotels in Qatar, is also working with various investment partners in connection with at least six proposed future hotels and tourism attractions. These include a hotel at Doha Golf Club, a business hotel in the port town of Al Khor near Ras Laffan and an eco-resort on the northern coast. A recent public presentation regarding these opportunities is believed to have garnered significant interest from investors and international management chains alike.

In another positive move, the Qatar government has finally formed a General Corporation for Tourism (GCT) chaired by Shaikh Sultan bin Jassim bin Mohammed Al Thani (the role of tourism promotion having previously fallen on QNHC).

The objectives of the GCT will be to 'boost, improve and revitalise' tourism in the country. However, recent changes to the visa laws in anticipation of the Islamic summit have actually made entry to the state more restrictive, not less, with re-entry not permitted for a period of two months. Doha hoteliers have been urging the Department of Passports, Naturalisation and Residence Permits to revoke these changes as soon as possible.

Looking at the current hotel market in Doha, one would be forgiven for questioning the basis of such apparent faith in the future. Perhaps the simplest explanation is that investors can distinguish between LNG and hot air. With gas earnings estimated at around $2 billion per year, Qatar expects to have balanced its budget, and have this amount available for investment in other areas of its economy, by 2003.