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Dubai | The concept of a “home away from home” has long been promoted by hotels. They had no idea that short-term rentals would be precisely that at the time.

DUBAI | Short-term rental demand among visitors to the United Arab Emirates has greatly expanded, supported by a consistent development in the tourist industry, and most of it is due to post-Covid travel tastes combined with remote job choices.

Additionally, the FIFA World Cup, which will be held in Qatar in November, will undoubtedly increase the amount of tourists visiting the area.

That’s what’s inspired several well-known brands, like Airbnb and Sonder, to become more interested in short-term rentals.

According to Mohamed Tahir, brand consultant at Dubai-based The Adroit Agency, the major factors for the success of short-term rentals include accessibility, prominent locations, a lack of brand name-driven royalty costs, and affordable pricing.

One of the country’s emirates, Sharjah, introduced its “Holiday Homes Project” in August, enabling locals to rent out their homes to tourists and other visitors. The Sharjah Commerce and Tourism Development Authority estimates that there are more than 300 vacation residences in the emirate.

Dubai has also implemented a number of reforms intended to draw more visitors to the emirate, such as the remote working visa and multi-entry tourist visa, which may benefit this market in the years to come.

One of the strongest quarters for the local tourist business was the first quarter of this year since the United Arab Emirates’ tourism industry grew faster than it did in 2019. Over 7.12 million foreign overnight guests spent the night in Dubai alone in the first half of this year, a rise of 183% year over year.

10,000 active vacation rental listings have been recorded for Dubai. According to reports, occupancy rates in these apartments rose 32% between December 2020 and December 2021, with an average daily fee rise of 15–28% and an increase in average occupancy month over month of 94%.

Although the share of short-term rental apartments in the country’s hospitality supply is thought to be lower than in other important gateway tourism destinations, the selection is currently extremely varied.

Operators like Sonder are also available in the United Arab Emirates market in addition to Airbnb units. The largest developer in Dubai, Emaar Properties, as well as Accor, which owns the SLS Dubai Hotel and Residences in Business Bay, are also entering the country’s short-term rental market.

Who Resides in These Temporary Accommodations?

Even though there are concerns about the short-term rental industry’s lack of regulation in much of the world, demand for these apartments has increased in particular markets, including mid-level business professionals, consultants, and families travelling for fun.

These accommodations provide visitors greater independence than hotels while yet providing the convenience of a fully furnished home.

According to Turab Saleem, partner and head of hospitality, tourism, and leisure advisory services for Knight Frank, a real estate consultant, short-term rentals typically offer higher yields than conventional long-term rentals because the calculation considers the unit’s non-occupancy based on the annual lease value.

“As a consequence, rental returns are 10-15% higher,” he said, adding that demand for short-term rentals is anticipated to rise over 2023, supported by a steadfast tenant desire in more flexible leases as well as professionals utilising Dubai’s new remote working visa.

Completing the Housing Shortage for the World Cup in Qatar

According to reports, Dubai property owners are moving away from yearly leases and toward short-term rentals in order to accommodate the influx of World Cup football enthusiasts.

Although the World Cup will coincide with Dubai’s already busy tourist season, Amr El Nady, executive vice president of JLL’s global hotel desk and head of hotels & hospitality for the Middle East & Africa, expects a temporary surge in visitors to Doha who wish to see the entire area.

It might not be immediately noticeable on occupancy indicators because those often exceed the 80 percent level in November, but El Nady predicted that it will have a bigger impact on room and rental rates.

Since the World Cup in Qatar is billed as being the most geographically contained, Doha hotels will be filled, and United Arab Emirates hotels will be full thanks to the extensive schedule of shuttle flights being run to Qatar by companies based in Dubai and Abu Dhabi.

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