RevPar for holiday homes has trended downward compared to hotels, according to a new report from Knight Frank
Nearly five years after Dubai passed a law regulating the leasing of vacation homes in Dubai, there are over 10,766 active listing on AirBnB, according to a new report from Knight Frank.
According to the report, the active listings form just part of the total of 20,395 properties registered on the platform.
The report found that the holiday home market accounts for approximately 2 percent of Dubai’s total households – the highest proportion of all other key global hub cities.
Of the 10,766 active listings in 2018, 61 percent were for entire homes or apartments, compared to 31 percent for private rooms. Another 8 percent were for shared rooms.
In a previous 2016 report, Knight Frank noted that the vast majority of holiday home supply was centred in Dubai Marina, the Palm Jumeirah, Jumeirah Beach Residence, DIFC and Downtown Dubai.
“As of 2018, these submarkets have a far higher density of holiday home units compared to 2016, and we have now started to see short term rental accommodation appearing in new districts east of Sheikh Zayed Road and in the most historic parts of Dubai north of Za’abeel Park,” the report said.
Between late 2017 and early 2018, Knight Frank noted that it detected a “divergence” in achievable RevPar (revenue per available room) in holiday homes and the hotel market.
For hotels, RevPar increased over this period, whereas holiday home RevPar trended down. During the same time frame, only holiday homes with four or more rooms outperformed hotels, although the report noted that the segment “appears now to be falling in-line with the hotel RevPar.”
“As is now generally accepted, holiday homes have had a discernible impact on the hospitality market,” said Ali Manzoor, partner, hospitality and leisure. “In general hotels outperform the holiday homes market with the exception being during summer months during which they are either on par or holiday homes outperform.”