Qatar must lift standards of service if tourism sector is to grow

Professor Robert Coelen was recently appointed as the executive dean of Stenden University Qatar and spoke exclusively with The Edge about the potential for growth in the tourism sector, which in turn would mean the service and management industry which Stenden specialises in, would have a big role to play in the Qatar’s future. Issa Al Mohannadi the chairman of Qatar Tourism Authority at a recent press conference suggested that the tourism sector would be expected to contribute as much as eight percent to the country’s gross domestic product (GDP) by 2030.

Coelen, who was previously the president of all international branch campuses  (Stenden have campuses in Qatar, Bali, Thailand and South Africa in addition to those in Netherlands), says some people view his move as a demotion. “I do not see it like that,” he explains, “I see it in terms of where can I have, with my ideas, my energy and my enthusiasm, the biggest impact? It is one thing to lead people with some ideas and hope they land. It is quite another being able to grab one of these campuses and start to move it. So, I asked my president whether I could look after one campus, because I felt I might be able to have more impact.”

“I think we have to work on senior management, but at the same time work on the service quality of the operational staff.” – Professor Robert Coelen.

So why Qatar? Coelen says the opportunities were simply too good to pass up. Qatar was the place where he felt Stenden could be the most meaningful to both Qatari society and their main campus.

Plans are already in place to develop the industry, says Coelen, and touristic infrastructure development is already underway in some cases. “For the meeting infrastructure, look at what is being developed next to City Center in the way of a convention centre,” he says. “Look at the 118 hotels that are being built as we speak, look at the plans for the region’s biggest zoo, for theme parks, you name it, it’s all being planned.”

The government, adds Coelen, is also encouraging capital investments within the sector, which is expected to increase by 10.7 percent between 2013 and 2017. There is also an effort to turn Qatar into a hub for sport, whether it is football, tennis or golf. All this for Coelen is proof that the government sees a different Qatar in the future.

A job creator?

There are currently 20,000 people involved in the hospitality industry in Qatar, says Coelen. By 2030, this number is expected to increase by another 100,000 according to the QTA. “That is a lot of people to manage, a lot of activity in the domain that we feel we are specialists [in],” he adds.

Coelen believes it is imperative for Qatar to create a uniform level of service excellence throughout the country, a concept which he calls Qatar Plus, something it is in dire need of at the moment. “If a ride from the airport in a Karwa taxi is a disaster, or your arrival at the hotel is a disaster, or you have trouble getting to the museum because of insufficient levels of service, yeah sure you might have pockets of excellence but they are not going to work for you,” he explains.

Relating a recent experience Coelen himself had, arriving at the Doha Airport, a taxi driver who had only been in Qatar for 15 days and did not know how to get to his apartment. “I am thinking what has this company done to help this person be efficient? Nothing. They probably tested if he could drive a car, that he was well groomed, spoke a little bit of English. If I [was a] tourist, I would get angry.”

However, Coelen believes the importance of service is slowly beginning to take importance among local businesses. “I think we have to work on senior management, but at the same time work on the service quality of the operational staff,” he says. For example, it is now compulsory for tour guides in Qatar to go through a programme and pass an exam at Stenden before the QTA approves an official tour guide licence.

Coelen is hoping to have a concept of Qatar Plus in the next few weeks, which he will present for a request to fund a six-month study. “I am talking very short lead-times. 2022 is bearing down on us. It is just eight years away,” he says. “I get a feeling from all the conversations I am having that they need better service, but it requires a cultural shift. If we teach locals to be hotel managers, we better make sure they have operational staff who also have a service mindset. If you do not do this hand in hand, then you have a head that doesn’t know where it wants to go, legs that know how to run, but are not being told to run or given the freedom to run.”

The devolution of trust is one of the most important things an organisation can do to let individuals contribute their worth to the success of an organisation, says Coelen. Whether that is happening fast enough in Qatar, only time will tell.

Growth opportunities

If Qatar is able to tackle its service problem, there are numerous trends emerging in the tourism market that are waiting to be capitalised on. The halal tourism industry is one of them. Many Muslim-majority countries have started to offer specialised hotels that do not serve alcohol, beach resorts with sections for covered women and heritage-based tourism packages.

A Zawya report on the State of the Islamic Economy estimates the Muslim tourist market was worth USD137 billion (QAR499 billion) in 2012, excluding the Hajj and Umrah. Additionally, the Gulf Cooperation Council which represents only three percent of the global Muslim population made up 31 percent of the total Muslim travel expenditure. Neighbouring countries such as Saudi Arabia that had an outbound tourism expenditure of USD17 billion (QAR61 billion) and even Iran that spent USD18 billion (QAR66 billion), could be a boon to Qatar’s tourism industry.

However, there have been challenges in creating hotel concepts and other touristic infrastructure that are offered in a way that is inclusive of non-Muslim customers. At Stenden in Qatar, Coelen says they are working on developing a semester focussed on doing business in the Arab world. He is confident that many students at their other campuses would be interested in such a course. Inter-cultural issues will be one of the biggest challenges these destinations will have to contend with, asserts Coelen.

Alcohol consumption is certainly an issue that continues to emerge. Coelen says the authorities need to come up with a definitive position on the matter. “You hear all these stories, if you are going to have the 2022 World Cup, you need to relax the alcohol laws or you aren’t going to have any visitors. The notion that it is a rowdy crowd, I haven’t done any research, but that is not my image of the global soccer-loving crowd,” he says.

“What I hear is that Qatar is particularly focused on providing a family environment in the Arab sense. That is good, it is a segment of the market,” says Coelen.

Infographic: The rise of Muslim tourists

However, he is of the opinion that there is a bigger market that Qatar needs to focus on, the middle class. Specifically, from the Asia-Pacific region, which is set to explode in the coming decades. According to an Amaedus report, over the next two decades, as much as three billion Asians will enter the middle class, and by 2050, their per capita income could rise 600 percent in purchasing power parity equalling Western markets.

“This is the bulk,” claims Coelen, “if you are investing in the future, what are you taking into account? Europe? North America? I do not think so. India, China, South-East Asia, I believe that this is the reality we have to plan for.”

Unprepared or unrecognised?

This is perhaps where Qatar’s trajectory of investment is at odds with global trends. For example, of Qatar’s 127 hotels currently active, three-quarters of them are in the luxury and upscale sector. The segment of the market has grown by almost 20 percent year on year over the past three years, and half of the 124 planned hotels in Qatar are to be for the luxury and upscale sector.

“If I were investing in hotels right now, I would be going for three- and four-star,” says Coelen. “They are the ones that will continue to fill. Yes, there is always going to be a market for the super-wealthy. But, we are talking about investing in the future. There are going to be more people that will be able to afford three- and four-star hotels.”

Qatar’s high-end hotels are already beginning to see downward pressure on room prices as more luxury hotels come online and compete for a market that is just not growing at the same pace. “Looking around here, you would get the impression that it is only for the rich, I mean there is talk of a seven-star hotel?” he says.

8% - The amount Qatar’s tourism sector is expected to contribute to GDP by 2030.

In 2012, occupancy levels in five-star hotels decreased by 6.8 percent from the previous year, while three- and four-star hotels saw an occupancy growth of 1.4 percent and 6.3 percent, respectively. However, three-star hotels have seen only a small increase in supply of three percent between 2010 and 2012. 

The profile of the population on the move is going to change from Europeans and North Americans, to Asians with a different life experience, and a different set of expectations, explains Coelen. Building hotels and even attractions such as theme parks with the current model in mind might not be the best way to go, he adds.

This will be one of the topics Coelen will bring up at the upcoming Tourism in Tomorrow’s World conference being held in Qatar in February. “Something that takes the next four years to build, it will be 2018, already the Asian-Pacific middle class will be bigger than anything else, and spending more than any other region. I think people have to be very open-minded about what they predict their market is going to be,” he concludes.