July 02, 2017

Qatar’s travel sector feels the squeeze of sanctions

Mounting deficit. View of departures area at Hamad International Airport in Doha, on June 20. (Reuters)

Doha - A boycott imposed by four Arab countries that ac­cuse Qatar of supporting terrorism is squeezing the tourism sector and Doha’s hotels, which usually are full during Eid al-Fitr, saw steep falls in occupancy rates this year.

A Reuters survey of five major hotels determined average occu­pancy was 57% at the start of the Eid festival, which marks the end of the Ramadan fasting month when friends and families eat and pray to­gether and take holidays.

“We’re usually packed with Sau­dis and Bahrainis but not this year,” a staff member at a five-star hotel said.

Aviation analyst Will Horton estimated Hamad International Airport, one of the Middle East’s busiest, would handle 76% as many flights in early July compared with the same period last year, a loss of about 27,000 passengers a day.

The airport did not respond to a Reuters request for data on the ef­fects of sanctions.

Visitors from the rest of the Gulf Cooperation Council usually ac­count for almost half of all visitors to Qatar. So the decision by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt to cut diplomatic and transport ties on June 5 hit traf­fic hard.

“Doha in early July, assuming the restrictions remain, will have less capacity than a year ago — a confronting figure for a region where every month sets year-on-year records,” said Horton, a sen­ior analyst at Australia’s CAPA Centre for Aviation.

There is no breakthrough in sight for the crisis in which the four Arab countries issued an ultimatum to Doha to close Al Jazeera television, curb ties with Iran, shut a Turkish military base and pay reparations. A defiant Doha denied accusations of supporting terrorism and said the demands were unrealistic.

Hundreds of weekly flights to and from Qatar have been cancelled because of the dispute. Hamad airport will lose fees paid by air­lines and passengers, as well as terminal revenue from duty free shops and restaurants.

Air links suspended by the four Arab countries represented ap­proximately 25% of flights by state-owned Qatar Airways, one of the region’s big three carriers.

Elsewhere in the tourist sector, hotels, restaurants and other facili­ties have had to find new sources of services and goods, in some cases at higher cost, due to the boycott, said Rashid Aboobacker, senior director at TRI Consulting in Dubai.

“A substantial drop in visitor ar­rivals is likely to force hotel and real estate developers to re-evaluate their strategies and priorities, po­tentially causing delays to some of the ongoing (tourism) projects,” he said.

Qatar’s World Cup organising committee said sanctions had not affected preparations for the tour­nament and alternative sources for construction materials had been se­cured.

Qatar has said 46,000 rooms will be available to host fans by the time of the World Cup. In March, it had 119 hotels with 23,347 rooms, the tourism authority said.

Developing business and leisure tourism is part of Qatar’s drive to move its economy away from reli­ance on oil and gas revenue. Doha aims to raise the tourism sector’s contribution to GDP to 5.2% by 2030 from 4.1% now, while raising the number of people employed by nearly 70% to 127,900.

(Reuters)

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