Consumer demand should see further recovery in H2 2022, driven by World Cup activity. However, higher rate hikes and supply chain pressures mean MNCs should anticipate higher business and operating costs. B2Cs face a temporary opportunity to boost sales in Qatar but will have to consider arriving tourist profiles, the nature of their accommodations, and their potential activities during a sports tournament while setting targets. Meanwhile, B2Bs will also find opportunities in customers serving the World Cup but will have to manage high costs and adjust post World Cup expectations.
Overview
Qatar attracted over 23.5 million ticket requests, with a 3,500% increase in tourism interest from Europe. Tourist arrivals saw a marked rise in Q1 2022, with hotels witnessing an overall occupancy rate of 56% in February. Despite higher activity growth, operating costs remain high: business continue to face rising business costs, with the construction sector facing significant price increases; copper saw a 70% price increase, and iron ore has more than doubled in price. Yet, a strong increase in hydrocarbon revenues support Qatar’s economic outlook. The country has reclaimed its title as the world’s top LNG exporter, with export revenues hitting $11.93bn in April, nearly double last April’s figure of $5.75bn.
Our View
Domestic demand in Qatar will remain robust and continue to grow, positively impacting the B2C, B2B and B2G sectors. Higher hydrocarbon revenues will allow for increased budget spending in H2 2022, with increasing oil and gas revenue and expanding LNG production maintaining a budget surplus of around 15% of GDP. Potential expansion in public investments will likely be transferred to infrastructure spending. Early signs show that the World Cup will attract the intended amounts of potential 1.5 million visitors, with 5,000 new hotel keys expected to be completed ahead of the tournament in November. This will increase consumer spending growth from 2.9% in 2021 to 6% in 2022.
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