Tourism up, growth down: a year on from the Qatar World Cup

Reuters/Imad Creidi

• Economy slips after tournament
• 2023 tourism up 157%
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A year ago, the Al Bayt stadium, 35 kilometres outside Doha, hosted the opening game of the first World Cup ever held in the Middle East. More than 67,000 supporters thronged the giant complex to watch Qatar’s first game against Ecuador.

The stadium will come into its own again in January when it hosts the opening match of the Asian Cup, and again in February when teams return for the final.

But, for the most part, the venue lies eerily quiet, residents say. Pre-tournament talk of an upper tier of the stadium, which is shaped like a Bedouin tent, being converted to a hotel and mall has proved illusory.

It was certainly the most expensive World Cup. Estimates now suggest the overall cost was in the region of $220 billion, about 60 times the $3.5 billion that South Africa spent on the 2010 tournament.

But was it worth it?

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In the fourth quarter of 2022, Qatar’s economy grew by 6.6 percent quarter-on-quarter on a seasonally-adjusted basis, the single fastest quarter of growth since early 2012.

However, growth has failed to keep up so far in 2023. Data for Q2 showed a slowdown from two percent year on year in Q1 to -0.5 percent.

“This was partially driven by the hydrocarbon sector that remains constrained by capacity, but also that activity has slowed since the peaks reached during the football World Cup,” said James Swanston, Middle East and North Africa economist with Capital Economics.

Oxford Economics Middle East forecasts a 1.6 percent expansion of the country’s non-energy sector this year and 3 percent in 2024.

OE’s chief economist, Scott Livermore, said: “The longer-term benefits will come from the infrastructure built for the World Cup and the positive marketing benefits associated with a successful World Cup.”

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On the ground, Qatar now boasts formidable infrastructure after the frenzy of construction and upgrading of roads, pavements and cycle paths.

During the group stage of the tournament the Doha Metro and Lusail Tram networks notched up more than 9 million trips, with a daily average of 700,000 passengers, in a country of little more than 2.5 million inhabitants.

But Simon Rubinsohn, chief economist at the Royal Institute of Chartered Surveyors (Rics), said the subsequent sentiment from construction professionals operating in the country is “downbeat”.

“I think it was inevitable that there was going to be some sort of unwinding of that big activity splurge,” he said.

Rubinsohn said that the Rics headline construction activity index was -33, the weakest reading since the survey began, while new business activity remains “deeply negative”.

“What we’re hearing is you come down after that high, the sugar rush, then you stabilise. It’s not as if there aren’t programmes in place to deliver on other important goals for the country,” he said.

Demand has weakened against the growing supply glut that stemmed from the World Cup construction boom.

Faisal Durrani, head of research for Mena at the property consultancy Knight Frank, said: “This supply-demand imbalance, coupled with rising interest rates, which are fuelling affordability challenges, are together contributing to a shrinking mortgage market, while at the same time the number of home sales is declining.”

Reuters/Hannah Mckay

The total number of residential sales transactions fell by more than a third over the 12 months to Q2 2023.

Hotel room supply continues to trickle onto the market, with more than 1,230 keys added during the first six months of 2023. 

This after an unparalleled increase in room numbers in 2022, when almost 7,300 keys were delivered, taking the total hotel inventory to 38,750 rooms.

As of August 25 this year, Qatar welcomed more than 2.56 million visitors, exceeding the full-year arrival figures in 2022, and a 157 percent increase over the same period last year.

Oxford Economics forecast that visitor numbers will hit 3.7 million this year, an increase of 43 percent year-on-year.

Yet despite increased visitors, average occupancy fell from 58 percent to 53 percent over the first six months of the year. 

Hassan Al Thawadi, secretary general of Qatar’s Supreme Committee for Delivery and Legacy said in an interview with Sky News that he believed the World Cup was a “celebration of the Arab world”.

The first Gulf World Cup will be followed by a second after Saudi Arabia won the rights to host the 2034 tournament.

Before that, in 2030, Morocco will co-host the event alongside Uruguay, Argentina, Paraguay, Spain and Portugal.

Simon Chadwick, a professor of sport and geopolitical economy at the Skema Business School in Paris, said: “Perhaps the legacy is one for the Gulf, not just Qatar. 

“It has proved that the region can professionally, safely and successfully stage mega-events.”