_How Dubai home owners are taking advantage of the holiday homes market
Active listings account for 12.5% of the total number of hotel keys in Dubai, and while numbers may appear low in relation to other key global cities, it is important to note that Dubai has a far larger concentration of keys per household in relation to comparable destinations.
"Dubai’s holiday home market accounts for 2.0% of Dubai’s total households, the highest proportion of all other key global hub cities."
Over the last three years, we have seen a substantial increase in residential supply in Dubai. This has been the case in both high-density areas such as the Palm Jumeirah, Marina and Downtown Dubai and within newer parts of the city such as the Arabian Ranches and Barsha South districts.
Market supply
- One bedroom units account for 60%
- Studios account for 17%
- Two bedroom units account for 13%
- Three bedroom units account for 5% (traditionally difficult to lease as short term rentals)
- Four bedroom units account for 5% (traditionally difficult to lease as short term rentals)
The appeal of a holiday home versus a hotel in Dubai
The major appeals of short-term rentals compared to a hotel is the widespread availability of ancillary amenities such as swimming pools and gyms in residential buildings.
Unlike other cities where such amenities are not commonplace in residential buildings, their widespread availability narrows the gap in product offering between the two product types.
The vast majority of buildings in Dubai have features such as Wi-Fi, kitchen, washing machines, pools and gyms which aligns the value proposition between the two options to some degree. However, the data also shows that there are some areas where hotels in Dubai still maintain a clear advantage over the holiday home market.
First, the data indicates that there currently are very few holiday homes which classed as ‘Business ready’, only 55% offer instant booking and not one property offers 24 hour check-in.
This, combined with the relatively rigid cancellation policies, average response time of six hours, deposits requirements, cleaning fees and Airbnb booking fees mean that holiday homes often have drawbacks not seen in the hotel sector.
These limiting factors help to create differentiation factors from a service perspective even if there is less of an amenity gap in Dubai in relationto other markets. These factors are particularly important amongst corporate guests and more affluent leisure guests.
Additionally, due to the spate of mergers and acquisitions which have taken place within the hospitality sector since 2016, we are likely to see greater consistency in product offering globally and an increasing importance of loyalty programs.