Mar. 30, 2019
Qatar is years away from hosting the first-ever world cup in the Middle East and North Africa (MENA) region, with around 70% of related infrastructure completed as of 3Q2018. Heavy state investments have been made through bodies such as the Ministry of Culture and Sports (MCS), Qatar Olympic Committee (QOC), Aspire Zone, and the Supreme Committee for Delivery and Legacy (SC). According to SC, related training sites for the 2022 FIFA World Cup are on track for completion by end-2019. Notably, it is hoped that this premium event will be just the first of many international fixtures to be held at the cutting-edge venues going up, including eight stadiums. Indeed, to date, Qatar has confirmed its credentials as a prestigious destination, having hosted over 100 events in 2015/2016. And being mostly state-owned venues, one may conclude sustained government desire for their upkeep.
We have all seen the depressing images of Olympic villages fallen into decay after the event, with no legacy plan in place to sustain their appeal. So, what is next for Qatar's stadiums once the trophy has been lifted in December 2022, the crowds have dispersed, and the litter has been swept up? The name of the game is monetization of existing and forthcoming sports venues, but of course the capacity to achieve this is contingent upon creating memorable experience for all involved, from athlete to spectator. Enter facilities managers. Such facilities involve a myriad of services that need systematic upkeep, ranging from the marketing of events to landscaping and maintenance. These opportunities are considered in the Qatari Ministry of Economy and Commerce publication Facilities Management Workshop-Business Plans. Qatar's overall facilities management (FM) market is earmarked for growth from QAR12 billion in 2016 to QAR 25 billion in 2025. Yet, the report estimates the growth of Qatar's developing sports venue operations market (QAR 347 million in 2016) reaching QAR 716 million by 2025 on a CAGR of 8%.
The report underlines the business opportunity available to Qatar-based companies to provide facilities management services at sports venues, both locally and in the wider GCC. Also underlined is the advantage of scale, where larger FMs with a wider revenue base will be able to weather off-season periods while managing specialized facilities.
Qatar's FM market that keeps venues clean, landscaped, and an appealing commercial proposition has three groups, namely single service providers, bundled service providers, and integrated FM providers. The bulk of sector players comprise the first two categories and are SMEs, as international presence is by no means saturated, having opted for the JV or project-based business strategy. US-based AEG had managed venue operations at The Qatar National Convention Centre (QNCC) until 2012. The government report notes that while the global market for operators of significant sports venues is “dominated by global players such as AEG, IMG, Lagardere, and Live Nation, all of which have secured long-term venue management contracts with facility owners, the market in Qatar is fragmented and consists of both international and local players."
Ultimately, a stadium's success is measured by the exhilarating experience it is able to provide to the spectator. Its seating capacity, then, is a liability if left empty, given the associated cost of maintenance. Today, even live events are not immune to the rigors of digitalization, as the gadget-fixated youth market largely prefers to watch a match at home. This is no laughing matter if Qatar is to build a sustainable industry on the foundations of the World Cup. Potential stadium tie-ins with telcos offers one viable route to the digitalized market. The facilities management game tends toward longer-term agreements, which in terms of the sports industry curbs player numbers. However, the host of ancillary services performed and relative immaturity of the market still offer business opportunities to established venue operators. Yet, those firms will need to play a more creative game than the proverbial 4-4-2.