In Pictures: A year after COVID-19, Dubai's holiday home market shows ample resilience

Flashback to March 2020: Flights grounded, cities in lockdown mode. For the holiday home and short stay property market in Dubai, it was as if all of what was built in the previous three years had come to naught. Forget thoughts of a comeback, no one was sure whether there was even a rescue act possible.

Flash forward to June 2021: The buzz is back, and while tourists are yet to return to anywhere near pre-COVID-19 levels, there is enough activity happening to offer landlords and holiday home operators a new lease of life. The best part is that no one – not even the most ardent well-wisher – could have hoped for such a partial bounce back within 15 months.

Things could get even better – The opening of the Expo in October will finally deliver on its promise of giving a groundswell of support for the property and hospitality sectors. It also raises the possibility of a tantalizing duel between hotels and short-stay properties in attracting visitors. Especially those who mean to stay on for more than the obligatory day or two.

Short stay rentals had dropped by 20-25 per cent in the last 12 months, but closer to October, could well wipe out the decline and add a few percentage points. “Even then, there are rate advantages that short-stay residences can offer against hotels,” says Dr. Ahmed Samerai, founder of Al Bahar Downtown Apartments. “The no-business situation of March 2020 to August 2020 is distant memory. A bad dream.”

If there is no sudden flood of new units being added to Dubai’s current short-stay/holiday home base, then rates could inch all the way up until April next. Particularly, during December and January.

The Palm and Downtown should be the first to see marked gains, as has always been the case closer to the end of the year action. “By Q3-2021, after more than half of the world is vaccinated and people are eager to travel again, short-term rental is expected to be the biggest winner in the hospitality sector, breaking all previous performance records,” said Mahwussh Alam, co-founder, One Perfect Stay. “This was the message from Airbnb CEO Brian Chesky who predicted that millions more hosts will be needed to meet demand and we expect to see that demand reflected in Dubai.”

Currently, there is a nominal per night DTCM (Dubai Tourism & Commerce Marketing) tax a guest needs to pay for the first month and the VAT. “But, overall, the holiday home rental is pocket-friendly as compared to other options in terms of space and price,” said Alam. “With hotels, the guest has to pay approximately 26 per cent in taxes.”

A lot will also hinge on how smoothly travel takes place from within the GCC. If all the roads and flights are open, Dubai’s holiday home sub-market can expect a bumper ride all the way to March.

Ahmed Samerai of Al Bahar has one thing to say: “Take the security deposit from the resident – do not take liberties with that. Earning Dh6,000 or Dh10,000 a day as rent and then seeing a tear on the Dh30,000 sofa will not help the landlord/operator. Compromise on everything else but not the deposit.”

Industry sources are not calling it a full-on recovery, at least not yet. But as to whether the Dubai holiday home market is now good place, the answer would be an overwhelming…