UAE’s Hospitality Landscape

The New Kid on the Block in the UAE’s Hospitality Landscape

By Kush Anand, Associate - Strategic Advisory, Hotelivate

“Home away from Home”: the age-old promise of hotels and hotel brands has now found a place in the value proposition of actual homes. With Airbnb spearheading a global sharing economy revolution, the holiday home space has grown exponentially. Before we discuss this exciting, new look for hospitality, allow us to get the jargon out of the way. 

For the purposes of this article, the terms ‘holiday home’ and ‘vacation rental’ are interchangeable and refer to the same type of asset; a residential development that is let out by the homeowner to guests for varying periods of time, typically longer than a few nights but shorter than a whole year. Our research in the United Arab Emirates (UAE) market, particularly Dubai, has revealed this to be a rapidly expanding, highly competitive niche of hospitality.

UAE and Vacation Rentals: A Match Made in Heaven

It is well-known that the UAE represents one of the friendliest nations in the world for foreign investors and foreign direct investments. In fact, the country has taken numerous steps, including special types of visas, to further incentivize foreign investors. In conjunction with a consistently growing economy and residential supply, the vacation rental market was primed to be unleashed. 

Previously, foreign investors would invest in a home or two due to frequent travel and relatively relaxed regulations surrounding the deployment of liquid capital. These homes were only secondary for their owners and would remain vacant for many months in the year. In 2015, Dubai legalised Holiday Homes and the resultant proliferation of the industry can only be described in one word: explosive.

Back in 2015, AirDNA’s database (which tracks all holiday home listings on Airbnb and VRBO) would have revealed a total number of 1,641 vacation rental units in Dubai. Today, that number has crossed 19,000 and is set to continue growing with Statista estimating that the UAE will have approximately 2.2 million vacation rental users by 2026.

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