Dubai: Holiday home operators in Dubai have so far not backed off as the deadline ends to cease all short-term lets in the hugely popular Downtown Dubai area.
They continue to keep their Downtown properties listed for bookings, and have not issued any notices to their clients or partner-landlords that they will be stopping. Emaar, the master-developer, had sent out a circular saying all such short leases must cease by September 19.
But holiday home operators want the final word on this to come from DTCM (Dubai Tourism and Commerce Marketing), which is the only licensing body for holiday homes in Dubai. “We are still waiting for DTCM to come out with a further clarification,” said Vinayak Mahtani of bnbme, a platform that specialises in holiday homes. “I feel their earlier comments were satisfactory, which Emaar has not challenged.
“As far as I am aware all properties (marked for short-term leases) at Downtown continue to operate as usual, with no disturbances for the guests. Or for those private developers that own towers with these apartments at the Downtown.”
Meanwhile, on the ground at the Downtown, Emaar has instructed personnel at its own towers not to check in short-term stay guests from September 19. Multiple sources have confirmed this. But so far, it is not known whether private developers with towers there will follow suit.
Some clarification could yet come through before the day is out, the source add. They say their meetings with the concerned authorities have been quite fruitful.
Other holiday home businesses also confirmed they have not taken down listings of their properties at the Downtown. Average one-night stays could be anywhere from $50 to as high as $2,000, depending on the property and the scale of the amenities.
“We have the title deed from Dubai Government agency, and for us, Emaar is an entity we purchased the property from,” said the owner of one letting firm. “We purchased the property from them, they got their money, and they have nothing to do with the rest of it.
“We are happy with the way holiday homes work - this takes care of our property while we are away, the income is not great - because Emaar has its own supply - but at least it covers our service fees and financing costs.
“This is about competing in a fair market.”
Rules are there
Dubai has issued clear rules on how businesses should lease and operate holiday homes in the city. There are also clear rules on what such lettings should avoid.
When the laws were passed, it set off a major investment flow to acquire units and then place them via booking sites for holiday stays or short-term lets. Just last month, UAE-based IBC Group confirmed plans to commit $5 billion to acquire up to 10,000 homes to manage as holiday homes in Dubai. It brought in Berkshire Hathaway HomeServices Gulf to identify, acquire and finance these units.
Other major deals are also likely to flow out from the pipeline, sources said. For developers, the rush of interest in holiday homes represents more than a silver lining - they believe they have struck gold if the momentum is maintained.
This is why the industry does not want to see the sort of restrictions being imposed by master-developer on where they should do their business. “Emaar is just a commercial entity and does not have the mandate to dictate the rules governed by a decree,” said one source. “In older SPAs (sales and purchase agreements) for Downtown, Emaar contracted owners to only “advice” owners associations on how to change the rules.
“An owners association has to change the rules by a vote. And because owners association is forbidden by executive resolution to prohibit holiday homes - the same as for a developer - holiday homes cannot be banned from the communities.
“Everyone is waiting for DTCM’s standpoint. There has been a slow-down in reservations as tourist are concerned that they will not have a place to stay after September 19. Also, there have been a number of queries especially via Airbnb whether people will be allowed to stay post September 19.”
Why holiday homes are suddenly big business in UAE
* Global funds were to pump in billions into expanding the holiday home capacity in Dubai. This was based on the conviction that as in other global hub cities, the short-let market can develop into a major category of its own alongside the hotel industry.
* Some estimates suggest that as much as Dh3 billion have already flown into the holiday home space.
* There are more than 100 holiday home operators active in the market, and this has opened up significant employment opportunities as well.
* With new locations being developed, such as at Mohammad Bin Rashid City and Dubai Creek Harbour, this would have expanded the holiday home base further.