Dubai's tourism growth boosting holiday homes
Rented housing units hit 6,049 units hosting 168,502 guests in 2019
The continued growth of Dubai's tourism industry has encouraged investors and homeowners to capitalise on the abundance of opportunities in the holiday homes market, leading to an exponential growth in short-term rental units in the emirate and adding to the broad range of accommodation options that are available for tourists.
Dubai's Department of Tourism and Commerce Marketing (Dubai Tourism) has established clear legislations and regulations to ensure a comprehensive classification and verification process when issuing permits for holiday homes.
Dubai Tourism also continues to conduct regular inspections of units to ensure they meet the approved quality standards. Furthermore, an updated executive resolution and holiday homes guide featuring the various processes, requirements and classification criteria will be unveiled shortly.
Recognising the growing demand for the short-term rental concept, the holiday homes sector has seen a massive 40 per cent year-on-year increase since 2015, the year when the issuing of permits to operate holiday homes commenced and the number of rented housing units increased from 1,531 units hosting 11,783 guests in 2015 to 6,049 units hosting a staggering 168,502 guests in 2019.
The visitor segment that benefits most from holiday homes are families, as they are able to create a holiday that is tailored to their individual needs. As of August 2019, there were 712 hotel properties in the city, consisting of 119 five-star hotels, 149 four-star hotels, 252 hotels with 1 to 3 star ratings, 68 luxury hotel apartments and 124 mid-level hotel apartments; making a total 119,035 hotel rooms in Dubai alone. Additionally, the 6,049 holiday home units have widened the accommodation options for tourists.
The success of the holiday homes concept is a further boost to tourism growth in Dubai and is line with concerted efforts that are underway to make Dubai the world's most visited city in line with Dubai's Tourism Vision 2022-25. The tourism strategy has yielded rich dividends with Dubai being recently ranked as the fourth most visited city in the world for the fifth year in a row, according to the annual MasterCard Index of Global Destinations 2019.
As part of the strategy to boost visitor numbers, and with Expo 2020 Dubai expected to attract 25 million visitors, Dubai Tourism anticipates an increase in the number of property owners moving into the holiday homes business over the next two years.
Fadi Nwilati, CEO, Kaizen Asset Management, said: "Holiday homes are a great addition to the city of Dubai as it allows more variety of accommodation for tourists and visitors of Dubai, particularly for families. Most freehold buildings in Dubai are equipped with hotel-like facilities that are attractive to visitors."
With an increasing number of international visitors set to visit Dubai - 15.92 million visitors visited in 2018 and 10.85 million tourists already arrived in the first eight months of this year - a variety of projects are underway to ensure that the city will be able to accommodate and cater to a diverse range of visitors of varying tastes and from different nationalities, age groups and budgets. These projects include new hotels and entertainment destinations that are aligned with the city's vision, and are expected to positively impact Dubai's GDP.
Firas Al Msaddi, CEO, Fam Properties and Fam Living, said: "If landlords want to depend only on residents will long-term residency in Dubai, they will not be making the most out of investing in a global tourist destination like Dubai. I think to really capitalise on real estate investment in Dubai for income generation in Dubai, especially for landlords who have properties near global landmarks, like Burj Khalifa, Bluewaters and more, they will only be making the most out of it when they move to the holiday home."
Following the introduction of a law based on Decree No. (41) governing holiday homes in 2013, homeowners and authorised tenants in Dubai are able to convert their apartments into holiday homes. The growth in holiday homes is also being driven by effective government regulations designed to increase competitiveness, transparency, safety and standardisation in keeping to global best practices and to maintain the solid international reputation of the city.
"Based on Dubai Statistic Center 116,270 residential units are under construction, this will add a large real estate supply compared to Dubai's annual population growth rate of 6 per cent, meaning majority of investors will look to rent their properties to another target audience, tourists! With the large influx of tourism supported by Expo 2020 short term rentals are in huge demand. The only issue landlords will face renting their properties on a short term basis, is trusting the tenants without rental contracts," said Ahmed Al Hassoni COO of inventally.
Endorsing a similar positive sentiment, Cecilia Reinaldo, CEO, HOD, said: "Technology is allowing property owners to have a "do it yourself" approach which allows them control to drive the best financial outcome possible to their interest. Especially with data availability, it is natural to see property owners are interested in short rent as it's proving to be a great ROI." - email@example.com
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