Why Airbnb is Expensive, But Popular in Dubai – News
The average daily rate for short-term Airbnb rentals is lower than for hotels and furnished apartments
Dubai was among the top five most expensive cities in the world for Airbnb accommodation in a recent Bloomberg index. However, Airbnb rates in Dubai are always more competitive compared to those charged by hotels and apartment hotels.
The Bloomberg Index values short-term rentals in Dubai at an average of $ 185 a night. However, Airbnb disputes this and claims that the index overstates the cost of an Airbnb listing.
“First, this data takes into account advertised listings, not reserved listings. Second, this data takes into account almost all available listings – from a one-bedroom apartment to a 10-bedroom house and beyond. Even with these flaws, the data shows that Airbnb offers better value for travelers, especially compared to a typical hotel room, ”said Hadi Moussa, Airbnb’s Managing Director for the Middle East and Africa. Khaleej weather.
According to JLL, the average cost of a hotel room in Dubai was $ 181 in 2017, while the average daily rate for an Airbnb in the city was $ 112.
There are currently over 6,000 properties listed on Airbnb in Dubai, according to data provided by AirDNA. The typical annual income of an Airbnb host in Dubai is $ 2,400 and a typical listing is booked for 22 nights per year in the city. The majority of Airbnb listings are located in more upscale areas such as Downtown, Dubai Marina, and Palm Jumeirah.
“Airbnb hosts set their own price and typically keep 97% of what they charge for their listing. There are over 3,500 hosts in the UAE, and last year they welcomed nearly 90,000 guests from all over the world to their homes, ”said Moussa of Airbnb. .
Airbnb rates are a function of high hotel rates in Dubai, where five-star hotels account for 43.6% of the total park, Chestertons Mena estimates. Dubai’s growing popularity as a tourist destination is also driving up the price of Airbnb listings.
“Hotel rates are directly linked to demand and supply – and the higher rates reflect Dubai’s status as one of the world’s leading tourist destinations. As the fourth most visited city in the world, the city has significant demand to meet the accommodation needs of travelers, especially millennials and the younger generation, who thrive on shared services, ”said Olivier Harnisch , CEO of Emaar Hospitality Group.
“The typical Dubai Airbnb offering is generally of a higher quality than many other places in the world, with amenities on offer including swimming pools and gyms, access to shopping, transport, restaurants and beaches. These are all major selling points for visitors and factors that could allow owners to charge a rental premium from travelers, ”said Ivana Gazivoda Vucinic, Head of Consulting, Valuations and Consulting Operations, Chestertons Mena .
Additionally, in Dubai, only units in their entirety can be legally rented on Airbnb platforms (although some shared accommodation units are still appearing). It differs from the rest of the world where a room in a property, or even a bed space can be rented. This would impact the price and position Dubai as a more expensive option.
“As Dubai continues to attract strong tourism demand, which has enabled the city’s hotels and furnished apartments to generate an occupancy rate of 82% and 84% respectively since the start of the year, this strong demand spilled over into the Airbnb market, which provided owners with an opportunity to charge higher rates. With the majority of Airbnb listings being located in more upscale areas such as Downtown, Dubai Marina, and Palm Jumeirah, this translates into higher overall rates than those seen in other international cities that have a wider range of listings, “observed Christopher Hewett, director, TRI Consulting, hospitality management consultants.
As the Dubai Tourism Department targets 20 million visitors by 2020, and many real estate investors increasingly realize that vacation rentals generate higher rental returns, the number of properties listed on Airbnb is likely to drop. ‘increase considerably in the years to come.
Airbnb offers a softer price proposition for the wallet of budget-conscious travelers. It also provides clients with flexibility, a greater sense of independence and a chance to be more closely connected with the local community and region.
“Rather than focusing on price alone, Airbnb gives independent travelers a ‘home away from home’ experience by offering a better connection with locals and the ability to see the destination through the eyes of a resident rather than through the eyes of a resident. ‘a tourist. ”Vucinic added.
“We are seeing huge growth for Airbnb in new areas of Dubai such as Sports City, Jumeirah Village Circle, Production City, Greens, Tecom and Business Bay, where prices are lower and can accommodate the budget-conscious traveler. It’s not just about Downtown Dubai and the Marina anymore. With the growth of Airbnb across Dubai, we will see a sharp price correction to include everyone, ”said Anna Skigin, Founder and CEO of Frank Porter, an Airbnb management company in Dubai.