28 March 2017
The Ministry of Economy and Commerce (MEC) has unveiled new investment opportunities in ticketing services for sporting, cultural and entertainment events.

Among other benefits, this will allow local small- and medium-sized companies to provide booking and ticket sales solutions to local events, the ministry has said in a press statement. 

The initiative is based on the findings of a study on sports investment opportunities in Qatar and is part of the efforts undertaken to strengthen public-private partnerships and provide support to the sports sector, which represents a pillar of the economic diversification policy adopted by the State to achieve Qatar National Vision 2030. 

The study, undertaken by the MEC in co-operation with the Ministry of Culture and Sports, Supreme Committee for Delivery and Legacy, Qatar Olympic Committee, Aspire Zone Foundation and Qatar Tourism Authority (QTA), aims to enhance the contribution of the sports sector to the GDP and provide investors and businesses with an overview of investment opportunities available in the sports industry, the statement explains.

In the context of presenting investment opportunities in the event ticketing market in Qatar, the MEC has pointed out that the role of the ticketing service provider and its added value largely depend on the nature of the event. 

“This role can be as limited as providing a ticketing system or as extensive as offering an integrated multi-channel distribution network,” it explained.

The study found that ticketing companies usually offered discounted ticket prices to companies and sponsors of sports tournaments, while tickets sold to the public at various outlets were priced relatively higher.

In this regard, the MEC highlighted that ticketing companies could boost their sales by adopting effective marketing plans, involving trademarks and various communication channels (such as the Internet, call centres, ticket sales outlets and sales windows on the event site) to attract the public.

QTA is playing an important role in supporting the sports sector through strategic development plans aimed at bolstering local demand by 

hosting more than 100 key sports events organised between 2015 and 2016, including 60 international events, the statement further notes.
When it comes to competition in Qatar’s ticketing market, the study observed that local companies “lack the ability to meet the requirements of hosting international events by focusing on less complex and attractive sectors (such as cinemas)”. 

It also noted that the sports sector offers investment opportunities that allow new competitors in the market (both local and international) to provide additional services in various fields to differentiate themselves from the competition.

Meanwhile, the study outlined the financial plan for investments in ticketing services in Qatar, noting that investors could take advantage of this opportunity through the allocation of investments worth about QR31mn. 

The net present value of these investments is expected to increase to QR26mn over the next 10 years (2016 to 2025) at an internal rate of return of 19%.

Local companies with limited financial capacity can invest as low as QR15mn, with a net present value of QR13mn, the ministry has said.
Besides, the study indicated that if a company acquired the complete rights to distribute tickets, its revenues were expected to increase from QR46mn in 2016 to QR111mn in 2025. It also noted that small investors could achieve significant growth in revenues.

As for operating costs, the study showed that the cost of goods sold accounts for 78% of the total costs of ticket sales, which essentially represents the bulk of purchasing costs. 

Purchasing costs also include reimbursements to event organisers, artistes or participants. The study estimated profits arising from these investment opportunities before interest, tax and depreciation at QR12mn, with a profit margin of 11%, based on the cost structure and revenue analysis for this opportunity.

Event ticketing market set to grow
The event ticketing market in Qatar’s sports sector is set to witness ‘significant growth’, rising from an estimated QR30mn in 2016 to QR62mn in 2025 at a compounded annual growth rate of 8%, according to a study conducted by the Ministry of Economy and Commerce and other entities in the country.

The study indicated that this activity (event ticketing market) is expected to grow rapidly as the country prepares to host major local and international sporting events.

These are the Road World Championship, 2019 World Championships in Athletics and the 2022 FIFA World Cup. Qatar also hosts a myriad of annual events such as Doha Diamond League, Qatar ExxonMobil Open tennis tournament and the MotoGP World Championship.

© Gulf Times 2017