Opinion: Thinking long term for short-term rental sector in Dubai

OpinionKeith Cox

There has always been great demand for short-term rentals, from a wide demographic, including, holidaymakers or guests who are on holiday with family and prefer to have the “home away from home” experience, giving them greater flexibility. It’s also good for expatriates, those moving to work and live in Dubai, but need that new short-term home for the initial period before finding their new permanent home. Besides, there are men or women visiting Dubai on business purposes, staying for more than a few days, and preferring to have home comforts that a nice fully furnished and managed apartment will give them.

The demand for short-term rental has been evident since the beginning of the freehold market, when purchasing was granted by the Government of Dubai to expats back in 2002. Since then there has been a thriving leasing industry because of the demand, but being administered by agents without license from any government authority in Dubai. Decree No. 41 of 2013 was issued at the end of November 2013 after a consultation between the real estate sector and the Government of Dubai/ Department of Tourism and Commerce Marketing (DTCM), to regulate short term letting and in particular, holiday licensing in Dubai.

This is a major step forward in regulating this corner of the market and will undoubtedly go a long way in securing the holiday lettings market, providing a tighter structure and safeguard both the properties and the clients that rent them.

Public safety

So, why did Dubai regulate the short-term rental sector? Well, public safety is just one very important subject, which in my opinion has been left as a side issue for far too long. New regulation will provide the management and control enforcing operators to follow the same procedures as is widely recognised and expected throughout the hotel industry.

Over the past eight years or so we have seen major improvements in tighter structure and control relating to the buying and selling of property, so it is about time that this was recognised and enforced for the short-term rental sector also.

The Dubai government through its DTCM division has now regulated the vacation homes rental activity, which will enhance and control the monitoring of public safety. Guests are checked-in online via DTCM system with passport copy and contact details. This new regulation will encourage the visitor to stay for longer periods and will no doubt attract the seasoned hotel user to switch to renting managed properties, offering more space, independence and of course a more personalised package.

A survey conducted by DTCM reveals that the average short term stay is between three to four days. Our experience shows that the average stay for people choosing to rent short-term managed properties is almost double that, with occupancy levels reaching above 90 per cent.

While Dubai and DTCM continue to standardise the property market and increase tourist accommodation ahead of Expo 2020, these figures can only be seen as encouraging and goes in some way to support the demand we often read about on the subject of growth in both visitor numbers and property/hotel expansion.

Great alternative

Generally speaking, online travel is expected to almost double in value in the next two years. Our regular client surveys have pointed out that the primary reason for choosing to rent a property is not just the value but it is a great alternative to the ordinary, sometimes cramped setting of a hotel room. Unless of course you are fortunate enough to be able to stay in a large suite, which is often out of reach for most of us.

Apartments usually provide a number of options for those individuals who are looking for a short-term rental while visiting Dubai for business or pleasure. Most of them have a guaranteed quality, with the highest standards of interior design and furnishings and good locations, facilities and amenities.

Thankfully, this industry continues to evolve, and with it comes tighter regulation. I am totally in support of the continuing strides being made by Dubai regulatory bodies to further control and standardise the short-term rental sector. As I said in the beginning, in my opinion, it has been neglected for far too long.

Source: Keith Cox, Special to Property WeeklyPW
Managing Director of P K Properties. The company has been granted the license to operate under the Department of Tourism and Commerce Marketing (DTCM), under license No. 727624.

Al Nisr Publishing accepts no liability for the views or opinions expressed in this column, or for the consequences of any actions taken on the basis of the information provided.


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