UAE Holiday Homes Market Analysis 2021
Over the course of the last 4 years, the growth in holiday home rentals globally has been almost equivalent to all the existing hotel rooms in Germany, Italy and Spain together. As the world continues to move towards a post-pandemic reality, the holiday homes market is showing an even greater growth.
In Dubai, we have seen a gradual change of preference from traditional hotel rooms to holiday homes as guests prefer to stay in private, spacious and safer homey places. We at fäm Living were prepared for this consumer behavior shift and have enjoyed the high demand in holiday home units especially the large sized units.
As of today, UAE stands 3rd in the world for the highest Average Daily Rate (ADR) and thus posing new profitable opportunities for real estate investors from around the world. The average ADR for a 2-bedroom apartment in UAE increased by 5% in 2020 vs. 2019 despite the pandemic.
Dubai has seen an increase of landlords with large inventories venturing into the Holiday Homes market. Not only did we double our inventory over the past 18 months, we have also noticed investment firms and individual real estate investors with portfolios of more than 30 units showing greater interest in converting their investments into profit generating vacation rentals.
A recent study puts the projected GCC hospitality market at $32.5 billion by 2022, which includes a share of more than $7.5 billion for the UAE alone, our expansion plan is definitely in-line with this growth, we have expanded to newer untapped areas in Dubai which bought surprisingly great results.
The Dubai hospitality market is attracting discerning and cosmopolitan travelers and the preference for short-term leases are on the rise amongst these travelers.
With the Expo vibes already buzzing in the city, we have seen corporate travelers and companies choosing holiday homes over hotels due to the attractive pricing, amenities & packages offered by holiday home providers. As Dubai expects more than 25 million visitors for the Expo, we are confident that the holiday home market in Dubai will hit its all-time highs in the coming months.
Looking beyond Expo 2020, we are confident that Dubai will host major world events in future. Dubai will continue to grow as a major commercial hub in the GCC and will remain as a preferred tourist destination for the world. Many international companies conduct meetings and negotiations across the region, while using Dubai as their base just going to prove that Dubai is ready to grow as a center for all major business activities in the region.
As experience-based stays are being introduced and loyalty programs likely to follow, it is becoming increasingly more important for property owners to consider renting their property on in the short-term rental market. Property owners should grab this opportunity Dubai continues to offer and be able to add a new revenue stream from the tourism boom in Dubai.
Hoteliers should also remember to view the short-term rental market as direct competitors to hotels rather than a business model that targets a different demand demographic. By doing this, owners and operators can formulate effective revenue management strategies and give considerations to the entire market, which in turn will protect the value of their assets.
