The regional market for luxury vacation homes on the rise

DUBAI: When Vinayak Mahtani’s sea-view apartment in Dubai’s Palm Jumeirah was completely ransacked and abandoned by a tenant, it was crushed. He had inherited his father’s apartment and attached sentimental value to it.

After he and his wife renovated it and listed it on Airbnb to try short-term rentals in 2015, he was shocked to find he could double his rental income in a year. After that, his friends and family started offering their properties for short-term rental, which led to Mahtani officially registering his vacation home business, Bnbme, in 2018. Today, Bnbme operates nearly 150 properties in the United Arab Emirates and 20 in India, with plans to expand into Saudi Arabia.

“We are selective with the properties we offer to clients because they expect a luxury experience, so we will review a potential villa, assess the snags, let our designers spruce it up and improve it, and then we manage it. for an agreed period of time,” Mahtani explained in an interview with Arab News.

“We’re not looking to have thousands of properties and become the biggest provider of holiday homes in the Middle East. We refuse more properties than we accept because we want to maintain a brand standard.

Changing travel trends

Mahtani, who has worked in the hospitality industry since 2005, is poised to dramatically change consumer preferences.

The global vacation rental market is expected to top $111.2 billion by 2030, according to Precedence Research in late 2021. Additionally, short-term rentals have weathered the pandemic better than hotels in 27 markets , according to a joint report by major accommodation data providers. , STR and AirDNA, last year.

The change in consumption habits is noticeable as travelers have preferred to rent apartments or villas rather than staying in small hotel rooms, especially for families during confinements in large cities. Since then, the holiday home market has seen a global spike in demand that has shown no signs of stopping.

From January to April 2022, Bnbme recorded a 118% increase in revenue and a 76% increase in bookings. The main markets this year are Saudi Arabia, the United Kingdom, Russia, France and the United Arab Emirates.

“When the lockdown first happened in March 2020, hotel general managers called to ask if their customers could rent our apartments because they needed extra space or longer stays,” Mahtani said. . “So when the pandemic hit, we panicked and filled our entire inventory with customers who were paying lower than usual rates, but that kept us going for the difficult six months that followed. We didn’t let any of our staff go.

Dubai’s pandemic support

After that, Dubai’s masterful handling of COVID-19 measures has made the city a welcoming and easy-to-live-in place, especially for digital nomads and families during the pandemic.

As a result, Bnbme experienced a boom during the pandemic which led to higher occupancy rates. This growth is part of a luxury real estate boom that Dubai has experienced over the past two years. According to Knight Frank, a real estate consultancy, luxury home prices have risen at the fastest rate in 2021, with Dubai leading at 44% year-on-year.

“In the post-COVID-19 landscape, ultra-high net worth buyers have visited Dubai in large numbers,” said Andrew Cummings, head of prime residential at Knight Frank Middle East.

“To add to this, at the high end of the market, quality is now the watchword, with developers building prime properties to meet the demands of the global elite who over the past year have has shown interest in owning homes in Dubai.”

A comprehensive Knight Frank report from 2019 showed that Dubai’s holiday home market represents 2% of total Dubai households, the highest proportion of any other critical global hub city.

Saudi Arabia’s plans

Bnbme plans to expand into Saudi Arabia in 2023, starting with beachfront villas in Dammam and spacious apartments in Makkah. The company hopes to build on luxury standards beyond the actual properties; services include luxury car pick-up at the airport, celebrity chefs for private hire, in-home shisha services and organic toiletries from Europe.

“We wanted guests to stay in a property that had all the luxury resort amenities with the comforts of home,” Mahtani said. “What could be better than flying first class? Fly with a private jet. It’s similar to what we’re trying to do with hosting.