Is the success of QATAR more than a gas story? Success is always national vision, inspiration and commitment to growth! …by Dr. Theodore Theodoropoulos (Managing Director of PowerGlobe, Qatar)
Watch the 83 Investment Opportunities in Qatar. Ministry of Economy and Commerce (MEC) has identified 83 commercial and investment opportunities for the private sector across seven sectors of the sport industry until the year 2023. Event management and promotion, sport development, venue construction, sporting goods and equipment, sport commercialisation, sport tourism, and venue operations and maintenance are the sectors. The investment opportunities were identified through a study on investment in sports tourism projects, conducted in collaboration with the Ministry of Culture and Sports (MCS), the Supreme Committee for Delivery and Legacy (SC), Qatar Olympic Committee (QOC), Aspire Zone Foundation (AZF), and Qatar Tourism Authority (QTA).
The study comes within the framework of the MEC’s efforts to develop the sport business industry, increase the number of small and medium-sized businesses operating in the field, support entrepreneurs, and boost the contribution of the private sector to the national economy. The study is one of several conducted by the MEC as part of the Business Cluster in the Sports Industry Project, which aims to bring together companies, investors and research centres in the economic sector.
The study aims to provide investors and businessmen insight into investment opportunities in the sports sector and highlights issues to consider before launching a business in the sports industry. The study shows that the sports tourism sector in Qatar offers promising and profitable investment opportunities, and can be further enhanced by boosting the role of travel agencies that can attract a large number of tourists from around the world.
The study highlights Qatar’s efforts to develop its sports tourism by building on its rich calendar of sporting events and large number of high-quality sporting facilities, including Aspire and Lusail Multi-Purpose Hall, in addition to Qatar Airways and the large chain of hotels that offer international customers a mix of high-quality services and attractive packages.
The travel agency market in Qatar is also expected to grow as a result of the projected growth in the sports tourism sector, from QR18mn in 2016 to QR37mn in 2025, at a compound rate of 8%. This growth would peak in 2022 at QR48mn as Qatar hosts the 2022 FIFA World Cup. The study also examined the financial aspect of investments in the sports tourism projects, indicating that an investor must inject nearly QR1.5mn to maximise returns. The present net value of such an investment over a 10-year period (from 2016 to 2025) is QR458,000, while the projected internal rate of return is almost 11%.
Local companies with limited financial means can also partially invest in sports tourism projects as the study shows that an investment of QR772,000 has a net present value of QR229,000. In case these investment opportunities are fully tapped, the revenues will rise from around QR5.4mn in 2016 to nearly QR11mn in 2025, at a compounded annual growth rate of 8%. Thus, companies with limited financial means can also enjoy significant growth in revenue. When it comes to expenditures, the study shows that wages will account for around 33% of total operating costs, while general administrative costs and other expenses will account for 27% and sales for 21%. The study estimates profits from these investments – before interest, taxes, depreciation and amortisation – at approximately QR565,000 in 2025, putting the profit margin at 5%.
The study projects growth in Qatar’s tourism sector to continue, noting that the number of incoming visitors rose from 1.7mn in 2010 to 2.9mn in 2015 at an annual growth rate of 11.5% – the highest in the Middle East. Current estimates indicate an increase in the number of visitors to Qatar to 3.7mn by 2019, 4mn by 2020, and 7mn by 2030. The development of the tourism sector has been identified as a priority, given its contribution to the diversification of the national economy and the promotion of the private sector.
“Despite steady growth in Qatar’s tourism sector, the sport tourism industry is still underdeveloped. As Qatar gears up to host major international sporting events, the sector offers investors many promising opportunities,” the MEC added.