After the end of the World Cup, and expectations of Qatar’s return to its calm pace after more than a decade of intensive preparations, the new bet remains today in front of Doha, according to “bloombergInvesting everything it has built over the past years, and preventing it from turning into economically useless projects that do not achieve profitable returns.
The report notes that the Gulf emirate, which is rich in gas reserves, made plans, during its preparations to host the world championship, that far exceed the country’s business and tourism needs.
“I always told them I was worried about December 19, after the tournament is over, because then we will go back to normal life,” said Berthold Trinkl, chief operating officer of Qatar Tourism Corporation, referring to years of discussions with the World Cup organizing committee.
Doha considers that its investments, which exceeded $300 billion in its preparations for the World Cup, included plans to try to reduce its economy’s dependence on oil and gas, by creating other sources of wealth and growth.
Nevertheless, businessmen and investors assert that the path of building an economy that is not based on energy revenues may require a government aid package to avoid “expected economic shocks.”
The chief investment officer at Qatar Insurance Company in Doha, Giriraj Doshi, confirms that the sectors most at risk are real estate, hospitality and the food industry.
“The huge capacities that have been created to host this huge event will take a long time to be absorbed, which will lead to a slowdown or contraction of the economy,” he said.
The official at Qatar Insurance Company added that this situation “may put pressure on their lenders, but the impact will mitigate with the strength of Qatar’s finances and increase its spending to boost gas production.”
“Doha is empty again”
The report notes that Doha was already empty days before the final match between France and Argentina, which ended with the latter winning its third world title.
And after the commercial and residential neighborhoods, which are usually empty in normal days, were filled with foreign visitors and tourists during the World Cup days, the newspaper indicates that, even before the closing ceremony, fans began to return to their countries, as did large numbers of expatriate workers.
In this context, Fitch Ratings expects the country’s population to decline by 8 percent in 2023 to settle at about 2.7 million, with the return of workers on World Cup projects to their countries of origin.
Since 2020, the report says, nearly half of the country’s population has been low-wage foreign workers.
For his part, Ali Al-Salem, a Kuwaiti investor and partner in the Arkan Consulting Company, says: “It will be easier to celebrate the World Cup, as a victory for hearts and minds for Qatar and the Arab world, and leave it at that,” adding, “They are able to bear it,” referring to the costs World Cup.
In response to a request for comment, a government official said that by organizing the World Cup, Qatar benefited from an economic boost that accelerated its economic diversification initiatives.
Qatar seeks to reach 6 million visitors annually by 2030, nearly three times the number recorded in 2019, after it introduced reforms in real estate and residence laws.
In this aspect, the Qatari official adds: “The World Cup was a unique marketing starting point, to increase the publicity of this tourist destination.”
Real estate challenges
Preparations to host tourists and fans of the participating teams led to a skyrocketing housing price in the country, after the agreements concluded between FIFA and the World Cup Organizing Committee forced many hotels to vacate their rooms from residents before the start of the tournament.
After the start of these competitions, the report indicated that Qatar rented 60,000 apartments to the masses, which led to a continued increase in rent prices by between 20 and 30 percent, according to estimates of the company, “Cushman & Wakefield” real estate, during the month of October.
She added that this unprecedented rise in demand will inevitably be followed by a decline in the first quarter of 2023.
On December 19th, after most of the tourists have left, landlords are scrambling to cut their losses. Facebook groups for foreign residents in Qatar are filled with posts from tenants who say landlords are charging two-year contracts with exorbitant prices.
According to the Bloomberg report, weak World Cup revenues may be a problem for the new residential buildings and hotels that were built on the occasion of hosting the World Cup, and he continued that according to estimates by one of the workers in the sector, the new hotels were expected to recover 15 percent or more of their construction costs if they were fully filled during. tournament.
However, according to the organizers, about 765,000 fans came to the country during the first two weeks of the tournament, which is less than the 1.2 million people Doha expected to attend.
The construction of new hotels and the opening of more than 14,000 new rooms in recent months only in Qatar imposed a new reality on the hospitality sector in Qatar, due to the overcrowding of the market in front of the expected decline in demand after the World Cup, as official figures indicate that occupancy rates before the World Cup were less than 60 percent.
It is expected that the construction of new offices and residential buildings will continue in Lusail City, with a capacity of about 200 thousand people, which means stronger competition in the future.
Most investors and credit rating companies trust that the Qatari government will eventually intervene to mitigate the difficulties and risks it may face.
In this context, the newspaper notes that the country’s financial situation has become stronger, benefiting from the Russian war in Ukraine and the efforts of European countries to secure their energy needs away from Moscow.
According to the same source, Doha is working to expand its capacity to supply liquefied natural gas by more than 60 percent, pointing out that it is “concluding long-term supply deals with China and Germany.”
In a related context, Akbar Khan, an asset management officer at Al-Rayyan Investment Company based in Qatar, said that the efforts of decision-makers to continue diversifying and developing the non-hydrocarbon economy have witnessed a significant increase by hosting the largest event in the world, adding that “the speed and success of future measures will determine the extent of The strength of the continuity of these projects.
Other organizations and companies, such as “Trinkle” tourism in Qatar, believe that the World Cup will breathe new life into the tourism sector, in light of the Qatari efforts to create a tourist and commercial destination capable of competing with Dubai.
Real estate and tourism agents hope that the government will continue its visa and residency policies to encourage more foreign investment.
In this regard, Abbas Awni, head of sales at Land Royal Properties, says that hosting the tournament has accelerated the understanding that it is necessary to change some laws to develop the economy.
“Embracing the World Cup was an opportunity and a golden gift,” he said, adding that officials should “continue to facilitate procedures for people who want to live in Qatar to invest in it.”