DUBAI’S HOLIDAY HOME MARKET · 2017. 9. 11. · A quick history of the high jump DUBAI’S...

DUBAI’S HOLIDAY HOME MARKETOCTOBER 2016

HOW THE PEER-TO-PEER SHARING ECONOMY IS SHAPING THE HOSPITALITY SECTOR

A quick history of the high jump

DUBAI’S HOLIDAY HOME MARKET

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000

2.5

2.4

2.3

2.2

2.1

2

1.9

METRES

YEAR

STRAIGHT1700s

SCISSORS1874

EASTERN CUTOFF1892



1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000

2.5

2.4

2.3

2.2

2.1

2

1.9

METRES

YEAR

STRAIGHT1700s

SCISSORS1874

EASTERN CUTOFF1892

WESTERN ROLL1930



1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000

2.5

2.4

2.3

2.2

2.1

2

1.9

METRES

YEAR

STRAIGHT1700s

SCISSORS1874

EASTERN CUTOFF1892

WESTERN ROLL1930

STRADDLE1956



1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000

2.5

2.4

2.3

2.2

2.1

2

1.9

METRES

YEAR

STRAIGHT1700s

SCISSORS1874

EASTERN CUTOFF1892

WESTERN ROLL1930

STRADDLE1956

FOSBURY FLOP1968



1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000

2.5

2.4

2.3

2.2

2.1

2

1.9

METRES

YEAR

STRAIGHT1700s

SCISSORS1874

EASTERN CUTOFF1892

WESTERN ROLL1930

STRADDLE1956

FOSBURY FLOP1968

RIDICULE ANGER CHEAT ADOPT

Traditional and peer-to-peer


Traditional mode of business Peer-to-peer equivalent

Various

Dating

Fundingequity invest

Transport

Lodginghotels

Domestic Chores

Data never sleeps


5.0 EXABYTES(5 billion GB) of data produced between

dawn of civilization and 2003

Data never sleeps




Currently 2.5 EXABYTES of data is produced on a daily basis

Data never sleeps




Currently 2.5 EXABYTES of data is produced on a daily basis

Increased connectivity allows peer to peer

interaction

Airbnb©

To date, tens of millions of travelers have chosen Airbnb to experience cities not as

tourists, but as locals.


Airbnb©



74%of Airbnb are

properties outside the main hotel

districts

91%of travelers want to “live like a local” 79%

of travelers want to explore a specific neighbourhood

81%of hosts share

the home in which they live


Airbnb©



74%of Airbnb are

properties outside the main hotel

districts

91%of travelers want to “live like a local” 79%

of travelers want to explore a specific neighbourhood

81%of hosts share

the home in which they live


JUMEIRAHISLANDS

DUBAI MARINA

MEDIA CITY

JUMEIRAH BEACHRESIDENCE

AL SUFOUH

PALM JUMEIRAH

AL BARSHA

AL QUOZINDUSTRIAL

AL QUOZ

NAD AL SHEBA 1

AL BARARI

ARABIAN RANCHES

DUBAI SPORTSCITY

REMRAAM

UMM NAHAD

MOTOR CITY

CITY OF ARABIA

THE VILLA

DUBAI SILICONOASIS

ACADEMICCITY

INTERNATIONALCITY

AL WARQA 1

JUMEIRAHVILLAGE CIRCLE

EMIRATES HILLS JEBEL ALIVILLAGE

DUBAI INVESTMENT

PARK

JUMEIRAH

WORLD TRADE CENTRE

BUR DUBAI

DEIRA

AL KARAMA

DUBAI INTERNATIONAL

AIRPORT

UMM RAMOOL

RAS AL KHOR

RAS AL KHOR INDUSTRIAL

AREANAD AL SHEBA

DUBAI FESTIVALCITY

AL RASHIDIYA

MIRDIF

AL TWAR

GARHOUD

JUMEIRAH LAKES TOWERS

Dubai - Supply


Highest concentration

in hotel districts

Source: Knight Frank Research

JUMEIRAHISLANDS

DUBAI MARINA

MEDIA CITY

JUMEIRAH BEACHRESIDENCE

AL SUFOUH

PALM JUMEIRAH

AL BARSHA

AL QUOZINDUSTRIAL

AL QUOZ

NAD AL SHEBA 1

AL BARARI

ARABIAN RANCHES

DUBAI SPORTSCITY

REMRAAM

UMM NAHAD

MOTOR CITY

CITY OF ARABIA

THE VILLA

DUBAI SILICONOASIS

ACADEMICCITY

INTERNATIONALCITY

AL WARQA 1

JUMEIRAHVILLAGE CIRCLE

EMIRATES HILLS JEBEL ALIVILLAGE

DUBAI INVESTMENT

PARK

JUMEIRAH

WORLD TRADE CENTRE

BUR DUBAI

DEIRA

AL KARAMA

DUBAI INTERNATIONAL

AIRPORT

UMM RAMOOL

RAS AL KHOR

RAS AL KHOR INDUSTRIAL

AREANAD AL SHEBA

DUBAI FESTIVALCITY

AL RASHIDIYA

MIRDIF

AL TWAR

GARHOUD

JUMEIRAH LAKES TOWERS

Dubai - Demand


Source: Knight Frank Research

Higher proportion of individuals

seeking daily contracts

Higher proportion of individuals

seeking monthly contracts

The evolution of Dubai’s holiday home supply


4,200units

2,100units

657units

2 units

12 units

92 units

2010 2011 2012 2013 2014 2015 July 2016

Initial legislation

Relaxation of legislation

Source: AirDNA

248 units

Regional performance


SYDNEY185140

NEW YORK245164 CHICAGO

179150

BERLIN179150

LOS ANGELES

175170

AMSTERDAM191146

LONDON252144

DUBAI219144

PARIS214110

Average hotel price

Average Airbnb price (1BR Equivalent)

Source: Various

The composition of supply


Source: AirDNA

18% 44% 24% 9% 5%

Studio 1 bedroom 2 bedroom

3 bedroom

4bedroom

Common facilities in Dubai’s holiday homes


Source: AirDNA

Kitchen WiFi Washer/Dryer

Pool Gym Free Parking

Cable TV

Hot tub Smoking Pets Breakfast

92%

90%

83%

83%

74%

71%

61%

30%

17%

8%

9%

Holiday home median occupancy levels, 2015


Source: AirDNA

57%JAN

59%FEB

54%MAR

47%APR

42%MAY

37%JUN

29%JUL

43%AUG

42%SEP

48%OCT

53%NOV

39%DEC

Months available annually


Source: AirDNA

17%10-12 months

41%1-3months

20%4-6 months

22%7-9 months

Average Daily Rate (ADR), AED


Source: AirDNA, STR GlobalHoliday homes Hotels Premium value

NOV 2015

995871

14%

DEC 2015

1160914

27%

JAN 2016

1083914

18%

FEB 2016

1002834

20%

MAR 2016

998854

17%

APR 2016

995768

29%

MAY 2016

833627

33%

JUN 2016

778499

56%

JUL 2016

807541

49%

Holiday home RevPAR performance(January 2015 – June 2016)


Source: AirDNA, STR Global, Knight Frank Research

JAN

20

15FE

B

MAR AP

R

MAY

JUN

JUL

AUG

SEP

OC

T

NO

V

DEC JA

N

2016

MARFE

B

APR

MAY

JUN

JUL

Large differential between hotel and holiday home RevPAR

Larger holiday homes starting to outperform hotel

market performance

Large differential between hotel RevPAR and Studios

and 1BR unit RevPAR

Studio 1BR 2BR 3BR Hotels

1000

900

800

700

600

500

400

300

200

Holiday home RevPAR performance(January 2015 – June 2016)


Source: AirDNA, STR Global, Knight Frank Research

JAN

20

15FE

B

MAR AP

R

MAY

JUN

JUL

AUG

SEP

OC

T

NO

V

DEC JA

N

2016

MARFE

B

APR

MAY

JUN

JUL

Large differential between hotel and holiday home RevPAR

Larger holiday homes starting to outperform hotel

market performance

Large differential between hotel RevPAR and Studios

and 1BR unit RevPAR

Performance convergence during periods of low demand

Studio 1BR 2BR 3BR Hotels

1000

900

800

700

600

500

400

300

200

Who is most severely impacted?

More affordable hotels

Leisure oriented hotels

Hotels with fewer facilities

Unbranded hotels


Who is most severely impacted?

More affordable hotels

Leisure oriented hotels

Hotels with fewer facilities

Unbranded hotels

Main hotel districts such as Downtown, Palm Jumeirah, Dubai Marina and JBR

Serviced apartment sector targeting long stay guests downtown

Highly seasonal submarkets that cannot yield as effectively during peak periods

All hotels during “low” season


What is likely to be the government reaction?


Allow Holiday Home Supply to increase until 2020

Flexible supply that can swell in tandem with

Expo

Stop approving /

start revoking licenses

What is likely to be the government reaction?


Allow Holiday Home Supply to increase until 2020

Flexible supply that can swell in tandem with

Expo

Stop approving /

start revoking licenses

Room Rate

800 AEDAVERAGE RATE

Tax

80 AEDTourism

20 AED

POTENTIAL HOTEL REVENUE

Tourism Dirham

15 AEDPOTENTIAL HOLIDAY

HOME REVENUE

The reaction to Airbnb


RIDICULE ANGER

CHEAT ADOPT

• “not a major threat”

• “low-risk” threat to our business

• “it’s always going to be niche”






RIDICULE

• New York premium rentals are being charged in affordable areas

• Demonstrations in Venice

ANGER

CHEAT ADOPT






RIDICULE



ANGER

• “They ought to be thinking about regulation and leveling the playing field.”

• Hotels unions are funding organizations to block Airbnb.

CHEAT ADOPT






RIDICULE



ANGER

• “They ought to be thinking about regulation and leveling the playing field.”

• Hotels unions are funding organizations to block Airbnb.

CHEAT

• AccorHotels with Onefinestay

• Wyndham Hotels with LoveHomeSwap

• Push of lifestyle hotels

ADOPT

THANK YOU

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DUBAI’S HOLIDAY HOME MARKET · 2017. 9. 11. · A quick history of the high jump DUBAI’S...

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