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World Cup has instant impact on Qatari retail and tourism

World Cup logo on Corniche Promenade Joel Marklund/Bildbyran via Reuters
The Corniche Promenade in Doha has become a favourite spot for football fans visiting Qatar
  • Private sector activity, prices and optimism have all risen rapidly
  • Some Doha hotels are charging a 2,000% mark-up on rooms
  • Qatar and its neighbours hope for a long-term rise in visitor numbers

The World Cup has had an immediate impact on private sector activity in Qatar, according to new figures.

The Fifa tournament began on November 20 and the latest Purchasing Managers’ Index report, from Qatar Financial Centre, says the country’s wholesale, retail and service providers reported a rapid expansion in the second half of the month. 

Prices increased at a series-record rate, with the tournament supporting higher rates for hotels, rentals, flights and other tourist services. 

The average mark-up on hotel rooms is at 1,000 percent, says research firm AB Bernstein, while the Movenpick Doha and Grand Hyatt Doha are charging mark-ups of more than 2,000 percent on their normal room rate. 

The November PMI survey also said businesses were at their most optimistic about the 12-month outlook since October 2020, as they seek to capitalise on post-tournament opportunities. 

Yousuf Mohamed Al Jaida, CEO of the Qatar Financial Centre Authority, said: “November saw a rapid expansion in business activity in Qatar’s non-oil private sector as the World Cup kicked off, with growth unsurprisingly driven by the wholesale, retail and services sectors. 

“These industries also registered marked increases in selling prices during the month, with the overall rate of output price inflation the highest on record.”

He added: “The new order index witnessed a rise for the first time since hitting a record high in May, while new sales cooled slightly during the month. Similarly, the employment index rose in November, despite a decline in the employment level reflecting the slowdown in construction.” 

England fans watch their match against Senegal. The Qatari government hopes for a long-term rise in visitor numbers. Picture: Reuters/Peter Cziborra

More than 1 million fans are expected to visit Qatar during the World Cup, which runs until December 18, and the authorities are hoping their presence will spark a tourism boom.

The 48 matches of the group stage had a cumulative attendance of over 2.45 million spectators, according to Fifa. This translates to 96 percent occupancy, which is the second highest in World Cup history.

The country has spent up to $10 billion building the eight World Cup stadiums, according to the IMF. Since Qatar was awarded the tournament in 2010, it has invested $200 billion in infrastructure, including projects such as the Doha Metro, highways and the new Lusail City.

Joe Hepworth, CEO of British Centres for Business, wrote in an opinion piece for AGBI that he believes the tournament will provide Qatar with a “powerful staging post for developing a truly diversified economy”. 

Other Gulf nations are also hoping a successful World Cup will deliver a boost for their tourism industries.

On Monday, the UAE’s president, Sheikh Mohammed Bin Zayed Al Nahyan, visited Doha for talks with Qatar’s emir, Sheikh Tamim Bin Hamad Al Thani.

It was the UAE leader’s first visit since the 2017-21 blockade of Qatar. During his visit, Sheikh Mohammed hailed Qatar’s hosting of the World Cup as a “success” for all Arabs.

Output soaring, but new orders wane after construction boom

The Qatar Purchasing Managers’ Index, compiled by S&P Global, is based on survey responses from a panel of around 450 private sector companies.

The headline PMI, which is derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases, rose to 48.8 in November, up from 48.4 in October.

This is the first increase in six months and points to a near-stabilisation in non-energy private sector business conditions, according to S&P. 

The Grand Hyatt Doha is one of the luxury hotels charging hefty mark-ups because of the unprecedented demand. Picture: Hyatt

A rapid rise in activity was seen in the output index, which rose to 63.0, linked to retail trade and services. This was countered by a construction-driven cooling in new orders, however, as well as shorter supplier lead times and cuts to input stocks as firms looked to save costs.

Non-oil private sector output rose at its fastest rate since July and well above the long-run survey average, with marked growth in wholesale and retail and services.

However, there was a further cooling of new sales in November, especially in construction, as total activity growth was driven by the completion of projects.

Purchasing activity was further reduced in November as firms reported sufficient inventory levels. Input stocks fell for the fourth month running and at a faster rate as companies pursued efficiency gains.

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