UAE tenants save thousands of dollars swapping annual leases for long-term hotel stays

When Alan May moved from the UK to Dubai, he opted for the convenience and cost-effectiveness of hotel living until he found his feet.

Six months later, he remains at the Radisson Red Dubai Silicon Oasis without any desire to experiment with the formalities of renting his own home.

“The plan was to stay for about three to four months, then look for a rental apartment with two bedrooms… family and friends could visit Dubai anytime and have their own room,” Mr. May, 36, recalls. .

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“My plans changed in a month; the layout of the hotel was excellent, the proximity to my workplace and the seven-a-side football I play allowed me to re-evaluate the idea that I would stay at the hotel longer term.

Without any starting limitations, Mr May was able to save money, which would otherwise be swallowed up on rent, when he returned home to Scotland for Christmas.

The flexibility could also extend to visits by her partner and their two daughters using one of the hotel’s two-bedroom apartments or an Airbnb property.

Mr. May, operations manager of a construction company, is certainly not the only one thinking.

Brands such as Premier Inn, Movenpick and national names CityMax, Rotana and Rove were among several to offer tough rental rates last summer as the pandemic brought uncertainty and battered vacations.

With attractive monthly rates starting at MAD 2,999, many residents have avoided rental contracts in favor of long-term hotel stays.

Stuart Birkwood opened Radisson Red at Silicon Oasis in February 2020, introducing branded apartments two months later, and now offers hotel rooms at extended stay rates “due to market demand.”

Stuart Birkwood.  courtesy of Rotana

“In 60 days, we had reached nearly 80% occupancy in the apartments alone, including 70% in long stays. [30-plus days], explains the general manager.

“Covid-19 has given us the perfect opening base due to the large number of people looking for a more flexible, affordable and unique hotel apartment offering.”

Radisson Red has guests on contracts ranging from one or three to six months and several on annual contracts. while some occupants even live there with pets.

For newcomers to Dubai or those facing a bit of uncertainty, having a more flexible extended stay option is the perfect solution.

“We’re their home now,” says Birkwood, who has set rates for all categories.

“But we are open to, and in these difficult times, sympathetic to evaluating what is best suited for us and our guests… especially those who renew regularly.

“Guests like Alan are an integral part of the building structure and it’s great to be able to build strong personal relationships with our long-stay guests.

Mr Birkwood also confirms that this is a useful income thread, especially with fewer business travelers and tourists to the country.

“With the opening during Covid-19, this has been a key part of our cash flow from day one,” he said.

“It gave us a great base to work from… allows us to divest our hotel component more aggressively knowing that we already have a lot of the outsourced business on the books.

“For newcomers to Dubai or those facing a bit of uncertainty, having a more flexible extended stay option is the perfect solution.”

Both Mr Birkwood and Mr May point out the ‘hassle-free’ perks, including Wi-Fi, cleaning services, furnishings as well as the usual hotel facilities such as a swimming pool, gym and restaurant. with discounts.

Mr May’s research confirmed that the financial advantages of renting over long-term hotels were “very balanced”, depending on the size of the accommodation and the location.

“But the perks for issues like finalizing bills and the landlord’s deposit make the option with the added convenience and flexibility of an extended stay an attractive alternative to renting,” adds the Briton. , who recently negotiated Dh300 off his monthly rate after signing a two-month studio contract.

With a fridge / freezer, cooking facilities and housekeeping included, he has no plans to change his living conditions anytime soon.

Ananda Shakespeare lists similar positives. A year ago, she traded apartment rental for hotel living, after giving notice of her Jumeirah Lakes Towers apartment to go on a trip. She has since moved again for better deals.

Ananda Shakespeare.  courtesy of Rotana

Ms Shakespeare’s plan was to visit Asia and Europe during Ramadan and the hot summer months of last year before resuming the rental in September.

“Due to the pandemic, this did not happen,” said the Briton, who heads the public relations agency Shakespeare Communications.

Instead of traveling to Sri Lanka, she moved into a one-bedroom apartment at the Citadines Hotel in Barsha Heights, Dubai for six months.

“I was paying to stay for the week. I loved the flexibility… it was much easier to live in a hotel with a front desk capable of taking meal plan and merchandise deliveries.

With the drop in income last summer due to the pandemic panic, the savings I made have been useful

It also allowed for a six-week working visit to Zanzibar without spending the money to rent an empty house. She returned to Dubai in January and requested a new room offer after finding that her previous monthly hotel rate had risen to Dh7,500.

While Ms Shakespeare hasn’t calculated the exact rent savings in her current arrangement compared to her former rented two-bedroom apartment, she no longer pays for utilities like WiFi, air conditioning and cleaning.

“These bills alone amounted to at least Dh 2,000 per month,” she said, estimating that these savings now total around Dh 25,000.

“With the drop in income last summer due to the pandemic panic, the savings I made have been useful and I love moving around, getting to know different parts of Dubai.

“A lot of friends have told me that they know people who live in Dubai nine months a year and find it cheaper to live in a hotel.”

This is good news for UAE hotel brands such as Rotana and Rove, both of which had embraced the long-stay market prior to the Covid-19 disruption.

Paul Rove Bridger.  courtesy of Rotana

“This has always been a popular offer for us, although it really gained traction after the start of the pandemic,” said Paul Bridger, Managing Director (CEO) of Rove.

“In anticipation of the future effects of Covid-19 travel restrictions, we felt that people would focus on finding convenient and affordable hospitality options, and our extended stay options were exactly what the local market had. need. “

Multiple locations in Dubai, trendy co-working spaces, plus convenience such as a 24-hour supermarket, free Wi-Fi, plus self-service laundry rooms and regular hotel amenities have helped maintain “high demand” for Rove’s extended stay options.

Mr Bridger says the arrangement is more convenient and often more affordable than renting an apartment, with no long-term commitment, “which is perfect for anyone who doesn’t want to be limited by an annual contract.”

As markets reopen, uncertainty about the future clears and tourists begin to return to the city, we expect the contribution from the long-stay segment to decrease.

While this way of residing clearly flourished during the height of the pandemic and has been a boost for many hotels, Rove says some guests have “lived with us for several years.”

The “rovers” staying on a monthly basis make up a “significant percentage” of total occupancy right now, with many residents for one to three months, according to Mr Bridger, who does not “expect this to happen. that long stay options disappear “.

“However, as markets reopen, uncertainty about the future dissipates and tourists begin to return to the city, we expect the contribution from the extended stay segment to decrease.”

All Rotana hotels across the country offer extended stay options, including its 17 properties in Abu Dhabi.

The UAE group has historically handled a long-stay segment that accounted for 20-25% of its business mix, according to Amal Harb, vice president of marketing.

“However, with the current changing market needs following the global pandemic, we have seen that number increase by 45 to 50 percent,” she said, adding that Rotana has introduced the “all suites” concept. in 1997.

Burjuman Arjaan Rotana.  courtesy of Rotana

This has led to its Arjaan Hotel Apartments by Rotana brand and, more recently, Residences by Rotana, designed for longer stays, with clients such as families, business clients and business travelers.

“Undeniably, following the events of 2020, there has been an increased demand for long-stay agreements as a viable alternative to renting or leasing,” Ms. Harb said.

“However, beyond the pandemic, extended stay offers are also a great choice for customers looking for a smooth transition when they move or stay for project and contract work.

“The option has always been an important business segment for us, and in a post-Covid landscape, it is particularly beneficial as it represents a guaranteed income period.”

Certainly, this continues to make sense to Ms Shakespeare who wants to avoid paying rent when away from the UAE.

“When I travel, I pay for an apartment that I don’t use… in the second half of 2019, I was in six countries in six months,” she says.

“Life is very fluid at the moment and it is difficult to make plans. What I’m doing is financially smart and fits my nomadic lifestyle… and [with] the world that opens up, being tied to an apartment does not make sense.

She adds, “This lifestyle isn’t for everyone, but I moved around a lot as a kid, so it feels natural to me.

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