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Sat 23 Nov 2019 11:06 AM

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Opinion: the rise of short-term rentals

How landlords are capitalising on the demand for temporary accommodation

Opinion: the rise of short-term rentals

Short stay With tourism numbers on the rise, the demand for serviced apartments in the UAE is bound to increase

The concept of short-term rentals has been around in the global market for just over 10 years. Initially introduced to offer an alternative to expensive, long-term rental property in prime cities, as well as provide travellers with a cheaper option to booking a hotel room in saturated markets, the concept has changed the face of the hospitality industry. Major hotels have expanded their business models to adapt to this change, and landlords are increasingly jumping on the opportunity to earn more from their assets.

Over recent years, there has been an increase in landlords cashing in on the UAE being one of the most visited countries in the world. According to Dubai Tourism, Dubai alone recorded 4.75 million international overnight visitors in the first three months of 2019, up by 2 percent from the guest numbers recorded a year earlier. Similarly, earlier in (August), the Department of Culture and Tourism – Abu Dhabi reported a year-to-date increase in hotel guest numbers by 3.5 percent compared to the same period in 2018.

With UAE visitor numbers increasing and expected to continue doing so in the lead up to and during the much-anticipated Expo 2020, short-term rentals are providing homeowners and investors the opportunity to capitalise on their assets for extra income. Short-term rentals typically offer higher yields than traditional long-term rentals as the calculation of the rate takes into consideration the non-occupancy of the unit based on the annual lease value. As a result, rental returns are 10-15 percent higher.

Landlords can also take advantage of peak seasons – for instance, during Eid or the festive season from December into the new year, hotel prices in the UAE tend to hike up due to the high demand. As a homeowner, why not have someone pay you these high rates to stay in your vacant apartment, while you enjoy a few more nights in the Maldives or spend more time with loved ones back home?

There are over 25 million international visitors expected for the Expo 2020, therefore, the demand for fully fitted, furnished and serviced apartments is bound to increase, giving the short-term market an additional boost. Whether through registered holiday home companies or managing the property themselves, more and more holiday makers’ dirhams are ending up in landlords’ pockets.

Short-term rentals

The tourist market is great for prime areas, but we also see a huge demand for monthly lets across the UAE on dubizzle, particularly from those who have just moved to the UAE, temporary visiting staff from other markets and people who do not want to commit to long term rentals.

A short-term rental option provides tenants with more flexibility, more options, and less hassle. It doesn’t incur extra charges in the form of furniture or monthly utility charges and eliminates the need to share post-dated cheques with the landlord.

As for the landlord, the absence of a long-term contract gives them more flexibility to utilise the property for guests and makes the asset more liquid so it can be sold with no tenant-strings attached. If fully registered and adhering to the legislation outlined by the regulatory body in the given emirate where property sits, landlords potentially have a lot to gain from putting their property up for short-term rentals – whether from holiday makers, professionals visiting the UAE, or tenants who simply don’t want to commit to a long-term rental contract. The demand for temporary accommodation is on the rise making the short-term rental market an attractive option for landlords and homeowners.


Matthew Sadler, Head of Business Development, dubizzle Property