Why Qatar’s investments abroad may not achieve their primary goal
Despite controversy such Qatar’s successful bid, FIFA World Cup 2022, noone can argue that Qatar’s investments abroad have not been sensibly planned, especially from the point of view of successful, long term profitable business. It is also evident that Qatar’s choice to invest, for instance, in luxury, also has a strategic PR component, to create awareness for the country. With luxury, Qatar gets instant visibility and an association with heritage, prestige and quality.
With an investor such as Qatar, Valentino could joing the top 5 luxury brands worldwide in the not so distance future, possibility which people have completely ruled out before the sale of Valentino to Qatar. And it is not just the financial resources, but also Qatar’s approach to promote talent and creativity and to attract the best professional to run such a business.
To better understand the PR component (some may say political…) one would have to look at the map of Qatar investments, which ”shine” in the leading metropolis of the world: London (Harrods, Shangri-La / Shard Tower), Paris (Peninsula Hotel, Ritz Hotel, Stephane Roland, LVMH), Milan (Valentino – and soon, possibly Versace) and last but not least, Porsche which is probably the best performing luxury car brand of the past decade, which even this year, at a time other luxury car brands cut back on production, Porsche announces, once again, record financial results. Qatar could have invested in many other luxury car brands but it chose Porsche…
Qatar strategic brand construction exercise spans accross sponsorship of most prestigious international sports events in tennis and golf, as well as equestrian (Qatar sponsored earlier this month in Paris, the legendary Prix de L’Arc de Triomphe) but also through Qatar Foundation, one of the world’s most prestigious science and medical research institutions in the world. The fact that Qatar Foundation is one of the main sponsors of Europe’s most successful football teams, FC Barcelona, speaks for itself.
But can this elaborate and complex PR exercise and strategic approach build Qatar into a world tourism destination? And here I am not doubting Qatar’s ability to build the best hotels in the world and the biggest malls. Yet, Qatar does not wish to replicate the Dubai or Abu Dhabi models, which even if replicated, would not be financially viable. Should Qatar (ever) accept that it cannot become a tourism destination but the Switzerland of the Middle East in terms of business, the country will flourish beyond its natural resources and simply reply on its unique take on business, education, research and innovation.
Next week, Qatar is preparing for the acquisition of a UK bank. Despite losses of US$2.7m, Harrods Bank is Qatar’s primary choice of investment. Although it is used to working as a developer and owner with most of the world’s top luxury hotel brands which manage its properties, Qatar announced earlier this year, plans to open a series of Harrods-branded hotels around the world. The first hotel will be a 300-room property in Bukit Bintang in Kuala Lumpur, while other cities will include New York, Paris, London, and locations in China and Italy
In this week’s ranking issued by FutureBrand, UAE (not Dubai or Abu Dhabi) tops an international ranking of countries which are forecast to make the biggest impact on the global landscape economically, politically and culturally in years to come. Qatar ranks fourth…
Oliver Petcu in Paris