A special market report that outlines the growth of Airbnb in Dubai between August 2015 and August 2017 has been released and revenues for properties listed on the online marketplace and hospitality platform during that time increased by 421% to top US$3.3million in August 2017, with listings nearly tripling to 3,249.
The relaxation of rules, effectively making it possible for home owners and tenants to cut out the middleman and list their property directly on the site, has resulted in a marked increase in the number of listed Airbnb units available, rising 161% from 1,241 units in August 2015 to 3,249 units in August 2017.
Dubai has been named as one of the most expensive destinations in the Bloomberg World Airbnb Cost Index of more than 100 cities. At US $180 (AED 661), costs in Dubai rose by more than 7% year-on-year to be named the third most expensive in the world, behind Miami and Reykjavik.
Chestertons research has revealed, rather than competing with Dubai’s hospitality sector, the Airbnb concept is complementing the hotel offering within the emirate by providing an alternative travel experience, with average occupancy levels topping 57% during Dubai’s peak season. During the low season months of June, July and August 2017, Airbnb occupancy levels averaged nearly 40% - on a par with performance in the hotel industry.
“In April 2016, a new Executive Resolution No. (1/2016) concerning the Second Edition of ‘Dubai Holiday Home Rental Regulations’ was introduced, resulting in the relaxation of the rules surrounding holiday home rentals. This has, in turn, increased the number of listings and created alternative accommodation options to achieve the emirate’s 2020 objectives,” said Ivana Gazivoda Vucinic, head of advisory and research, Chestertons MENA.
In April 2016, Dubai Tourism inked an agreement with Airbnb to allow homeowners to apply for licences without having to commission a third party as a management operator.
“Many real estate investors are diversifying into the holiday home rental market because of the ease in regulations, combined with higher returns when compared to the traditional rental market. On average, investors can expect an additional 5% return when compared to long-term leasing rental yields,” said Gazivoda Vucinic.
Average Daily Rates (ADR) for listings have retained consistent year-on-year levels with prices in August 2015 averaging US$153; in August 2016 prices averaged US$154; and in August 2017 the price was US$154. The first three months of 2017, denoting peak tourism season, witnessed ADR of US$226, US$201 and US$204 respectively, further underscoring the popularity of the community-driven hospitality platform.
Since its inception in 2008, Airbnb has become a trusted community marketplace for people to list, search and book unique accommodation around the world. To date, the company has assisted over 200 million guests in more than 65,000 cities and 191 countries.
“New regulations and an increase of Airbnb supply will help grow and diversify tourism, increase choice and attract new guests to the emirate while also providing investors with an alternative income stream,” added Gazivoda Vucinic.