Khaleej Times, Sunday, Jan 22, 2023 | Jamadi Al Thani 29, 1444
Dubai short-term rental market poised for a surge
As Dubai’s real estate sector continues its surge, a number of homeowners who
were renting out in the short-term rental space are now moving towards long-term
contracts. But that is not necessarily a bad thing, says an expert.
“At this moment there is this transition happening — migration of short-term
homeowners going to the long-term market. So there’s a reduced supply of
short-term rentals available. As a result, rates are bound to go up and the
short-term model will become more attractive again,” Gregory Lewis, founder of
AirDXB, a premier short-term rentals company in the UAE, told Khaleej Times in
Occupancy levels on AirDXB properties saw an aggressive increase compared to the
previous year. Noticeably, March saw a 99 per cent occupancy rate. Due to
Ramadan, April saw a decline to 87 per cent and this rate was maintained on
average throughout summer, beating 2021 for the same period, data showed.
September saw a rise past 90 per cent, and Q4 then sat at an average of 93 per
cent. As seen in the previous year, December saw a dip, which can be attributed
to many guests holding their travel plans until the New Year celebrations. Over
the year, 2022 saw a drop of 0.7 per cent compared to 2021.
In terms of length of stay, 2021 saw almost double the length of average stays
compared to 2022 from January to April. “This would suggest more tourists
travelled to Dubai for short holidays in 2022 given the easement of Covid-19
restrictions,” an AirDXB report said.
From May onwards, 2022 saw lengthier bookings made in comparison averaging
around 33 per cent higher than 2021. “This could be attributed to two main
reasons; in 2021 with the uncertainty of Covid-19 and the relentless access
changes countries made, guests were more active in cancelling bookings. The
second reason, with the changing global landscape in 2022, Dubai saw a surge of
people wishing to relocate to the city be it for employment, lifestyle or
leaving countries of unrest. The average length of stay was up 0.4 days compared
to 2021,” the report said.
With confidence for travel growing in 2022, the average booking lead time
increased approximately 300 per cent compared to 2021 as guests planned their
trips well in advance. In September, guests made more ‘last minute bookings’
than expected with an average booking lead time of 10 days approx. compared to
an average of around 20 days seen earlier in the year. This trend continued
until the end of November, AirDXB data showed.
The most popular areas for short-term rentals in Dubai continue to be the Dubai
Marina, Jumeirah Beach Residence and Downtown Dubai areas, along with the
Bluewaters zone. “While there is a higher supply in these areas the demand has
always matched it,” Lewis said. The Palm Jumeirah remains a major hotspot, with
new clusters coming onstream. “The value-added proposition at the Palm is
stupendous,” Lewis said.
Among the upcoming areas, Lewis pointed out to the Business Bay, Jumeirah
Village Circle (JVC), Jumeirah Lakes Towers (JLT) and Meydan areas. “Business
Bay is attractive due to its proximity to Downtown. Travellers can stay just a
few blocks away for much less. JVC has great architecture. It’s not quite there
yet, but is very close. JLT is quite close to the Marina but rates are lower.
Meydan is also very close to the Downtown area, and thus is getting quite
popular,” Lewis said.
The future looks bright for the short-term rental space, Lewis said. “The beauty
of Dubai is that it attracts people of all types in terms of spend, so there are
a lot of categories,” he added. The global financial uncertainties are also
attracting attracting a lot of investors to Dubai as well as tourists. “This
would all suggest that the future would be good,” Lewis said.