Crossing Swords

How would you describe the evolution of Qatar’s economic growth?

The National Vision 2030 is leading the country on a path of economic diversification. Hospitality is regarded as one of the strategic drivers, and this entails investments in Qatar in addition to investments in tourist areas abroad. Hospitality is part of the infrastructure needed to support the organic development of the country. As for the development of the tourism industry in Qatar, we need facilities and services that go beyond a portfolio of hotels. The opening of the new Hamad International Airport during 2H2013 will reveal a world-class facility that will enhance the passenger experience, whether inbound or in transit. That said, Qatar’s infrastructure is developing at a fast pace and, subsequently, the entertainment offer also diversifies every year. From high-end shopping malls and traditional souks, world-class museums and cultural hubs, to parks and unique outdoor recreational facilities alongside an increasing portfolio of hotels and food and beverage concepts, Qatar has something to offer both residents and tourists.

The tourism sector is becoming increasingly important in Qatar, with 85,000 new hotel rooms to come on the market by 2022. What role does Katara Hospitality play in these plans?

We have been at the forefront of our sector for more than four decades, as pioneers in many areas. Today, in terms of current room supply, Katara Hospitality was ranked the market leader during a recent benchmarking exercise conducted by Ernst & Young. We clearly intend to maintain our leading position by developing world-class hotels that are relevant not only for our portfolio, but emblematic for the country as well. We have recently launched a new project in the Marina District of Lusail city, planning to erect in this meticulously planned urban development as an iconic hospitality complex that is intimately related to the country. With an architectural design inspired by the seal of Qatar, the Iconic Towers in the Marina District are set to become a hospitality landmark for the industry. The crossed swords of the national seal have been architecturally translated into twin arched towers that rise gracefully from the podium level, while the landscaped gardens and the sea promenade symbolize the ocean and the palm trees. This simple yet elegantly shaped complex creates an easily identifiable landmark, recognizable beyond regional borders. The comple will host a luxurious five-star hotel that will cater to discerning business travelers and a lavish six-star hotel to meet the needs of those seeking sophisticated luxury accommodation, while branded apartments will accommodate permanent residents looking for the utmost comfort. This complex will include a total of 614 units. State-of-the-art entertainment and recreational facilities, including specialized boutiques, VIP movie theaters, exquisite signature restaurants, and a private cigar lounge are to be complemented by exquisite banqueting and conference spaces, as well as office-dedicated areas. Another hotel development is currently under study on a plot of land we acquired in the Foxhills district of Lusail city. In terms of our existing properties in Qatar, many will undergo major renovation works in 2013. Although Katara Hospitality currently focuses on its international expansion, we intend to maintain our position as a market leader in Qatar, while encouraging private investors to participate in building a solid hospitality network in the country.

How would you characterize the five-star sector in Doha?

The five-star hotel sector in Qatar showcases a variety of hotel concepts, from hotels that have shaped the hospitality landscape over decades, to new entries that target niche markets. The domestic properties under Katara Hospitality portfolio marked several “firsts” in Qatar: the hotel currently known as Doha Marriott Hotel was the first five-star hotel; the Sheraton Doha was the first internationally branded property; the Ritz-Carlton Doha was the tallest building in Qatar at the time it opened; Sealine Beach Resort was the first leisure destination in the country; and Sharq Village & Spa was the first luxury resort on the market. We will continue to develop hospitality environments that are not only representative for our portfolio, but emblematic for the country as well.

What are some of the benefits and challenges of operating in Qatar?

Katara Hospitality is primarily an asset manager. However, the development aspect of our business is closely related and interconnected with our core expertise. Many hotels under our portfolio have been developed by Katara Hospitality, from the project stage to becoming a valuable asset, while most of our international properties are currently undergoing major renovation work under our direct supervision. We have always worked closely with international hotel operators and each development was a learning experience for us. This gave us the depth of expertise and confidence to venture into becoming a trusted hotel operator. We identified the growth potential of business tourism in the country and we created the Merweb brand to meet the needs of discerning business travelers. Merwebhotel Al Sadd was the pilot project in the development of the Merweb brand and it opened late 2001. The hotel has received permanent recognition in the market for its services tailored to the needs of business travelers looking for affordable comfort. This year will see the opening of Merwebhotel City Centre. Directly connected to the City Centre shopping mall, the hotel is set to offer 362 units and a complete range of services tailor made to meet the needs of discerning business travelers. From overnight to extended stays, enticing dining options, versatile meeting and banqueting facilities, and also working spaces that go beyond the services of the typical business centre, the Merwebhotel City Centre will definitely bring to the market a successful operating concept.

Which markets is Katara Hospitality going to be focusing on in the near future?

Katara Hospitality’s mixed portfolio ranges from historical palace properties to business and resort hotels—there is no prototype that we look for in an asset before investing in it. Our diversification and expansion strategy involves investing in properties suited to our ethos and style, aligned with the Katara Hospitality brand values, while considering the return the hotel is likely to yield. Katara Hospitality is currently evaluating investment opportunities in business and leisure hotels in Western Europe, North Africa and the Arab Peninsula, as well as Southeast Asia and North America. Furthermore, as an entity owned by the government, we constantly find investment opportunities in emerging markets, following the directions generated by the country’s foreign policy in supporting developing economies. By investing in emerging markets, we take the challenge of being pioneers that support the development of the tourism industry in future destinations. Katara Hospitality will introduce the first internationally branded hotel in the Union of Comoros—a project due for completion in 2015—while we recently signed an MoU for investing in a hospitality development in the Republic of the Gambia and for another project in the Maldives. Consequently, through its investment, Katara Hospitality is committed to support local communities by creating employment opportunities and sourcing supplies from local markets, thus contributing to community prosperity.

What leads your decisions when planning to acquire a hotel?

When engaging into a project, we always look for something special that sets it apart and adds an exceptional dimension to our business, while taking into account the return the hotel is likely to yield. Katara Hospitality does not focus exclusively on acquiring iconic properties. We also create hospitality icons or turn assets that were designed for other purposes into true hospitality gems. A relevant example here is the Tazi Palace in Tangier, which was designed to become a royal residence and was transformed into a luxurious palace hotel.

What are the medium-term plans for Katara Hospitality?

We are planning to own 30 hotels by 2016 and 30 more by 2030. Katara Hospitality currently owns 26 properties, operational or under development, with 2011-2012 marking an important milestone in the company’s development, as we practically doubled our portfolio by acquiring properties in strategic international locations. Our European presence is also strong, and 2013-2014 will see the opening of several iconic properties in key markets. With a solid presence in France, Switzerland, and Italy, we are looking for further investments in key European markets, including the UK, Germany, and Mediterranean countries. We are also considering investments in North America. Furthermore, our aim is to become one of the leading hospitality organizations in the world and the Qatar National Vision 2030 creates the ideal framework for us to achieve this goal. Thus, we believe that doubling our portfolio within the time span of 15 years is also realistic.

© The Business Year – March 2013