Writing about this market since 2005.

Self-Catering Villas and Apartments Are Smart Options for Visitors

With over 5.8 million visitors in 2005 and occupancy rate in excess of 83 per cent, Dubai is fast becoming one of the world's premier tourist destinations. It is clear that local accommodation providers are riding the biggest wave of their lives as demand has clearly overtaken supply.

On the quality front, there is a wide choice of accommodation available in Dubai ranging from hotels or hotel apartments to self-catering villas and apartments. The latest option is much sought after in recent days.

Renting a furnished apartment or villa on self-catering basis proves to be a cheaper option than staying in many hotels, especially if you intend staying in Dubai for longer than the usual package holiday. It also helps if you are a large group or simply wish to have greater flexibility and privacy.

One of the most popular areas of Dubai is the Dubai Marina with its cosmopolitan atmosphere and posing a challenge to the most exclusive waterfront developments anywhere in the world.

Booking a hotel in Dubai Marina is out of reach for many travellers who would rather spend their budget on shopping. For this reason renting a self-catering apartment or villa can be a smart option, being more affordable, comfortable and even exciting.

There are many villas and apartments available for short-term rental on a self-catering basis. These can be for a minimum of one guest to as many as 15 according to the design of the individual property.

When planning to book a holiday apartment or villa in Dubai on self-catering basis, it is necessary to carefully select the right agent to deal with. The most recommended would certainly be those actually based in Dubai that can guarantee you full assistance on a 24-hour basis.

It is really the quality that matters when you choose your holiday home in Dubai. Some properties are equipped with every amenity you could think of, while others could end up being a bad surprise, to say the least. The list can reach a point where your vacation could get badly compromised.

Professional agencies maintain and check on the properties on a regular basis in addition to supplying accessories and services to a level that can meet and in some cases go beyond the standard of a five-star hotel.

Probably the best way to go about it, when possible, would be to actually inspect the premises before making any payment. This way you will be able to check the consistency with the information (photos or descriptions) that were displayed on the agent's website or catalogue.

In the end it all comes to experience and professionalism. There are many companies offering holiday villas and apartments in Dubai and around the world, which is a great advantage as it keeps the competition alive and the rates affordable.

However, be careful and do your homework before making your final choice. At the end of the day, it is your holiday on the line and you do not want to jeopardise it just to save a few bucks.

Alessandro D'Ubaldo was the founder and Managing Director of Dubaldo Real Estate Broker, which managed around forty furnished residences for short stays in Dubai from 2005, before the advent of platforms like Airbnb. He is a senior hospitality executive with over 20 years of experience in the GCC.

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Rent Out and Enjoy the Returns

It is a very common and time-tested practice in the Italian, Spanish or French Riviera to rent out a personal property as a holiday home to tourists. In fact, the short-term rental business has proven pretty successful in those countries.

Since Dubai is working on becoming an international holiday destination, it is interesting to consider this investment opportunity. By renting out a property on short-term basis a landlord has the chance to use the property for his/her own personal use, generate a high return of investment by letting it out to holidaymakers and at the same time benefit from the property's value appreciation.

The short-term rental concept could be applied anywhere in the world. But the real key to its success lies in its implementation within the local market.

The concept by itself is nothing new and certainly not invented in Dubai. So, the actual heart of the business is not much in the idea as it is in its execution.

Having the idea and the product (the property) is just about 10 per cent of the business. What really matters is the marketing, which I would value at 70 per cent and the actual daily running which could be valued at 20 per cent.

Setting up an apartment for short-term rental requires experience, interior designing skills, attention to detail and plenty of time and resources to follow up the actual furnishing process, utilities connections, daily running and marketing.

Some details are extremely important and if overlooked will compromise the stay of your guests. Hence it is essential to set up the property with the guests' needs in mind rather than following questionable personal taste.

One detail that is consistently overlooked is the actual efficiency of the bedroom curtains, which in the majority of cases do not block the light properly. This is usually due to lack of experience or resorting to 'good bargain' ready-made curtains resulting in an untimely, nature induced daily wake up call for your guests rather early in the morning.

Another important aspect to acknowledge is the considerable investment to be made in purchasing the bathroom face and body towels. It is in fact necessary to provide a high number of these to allow a twice-weekly replenishment. The same goes for bed sheets, quilt covers, pillowcases, etc.

In most cases the 'do it yourself' schemes work pretty well when you do have experience, knowledge and passion about what you are engaged in. Otherwise, it will simply result in complete frustration to say the least.

Without considering the daily management issues and the inevitable guests' complaints, even the twice-weekly house-keeping service is a far more demanding task than it seems.

A reasonable solution to this, especially if you are handling more than one property, is to refer the entire marketing and management to a professional agent who for a fee (usually 20 per cent of the rental) will take the weight off your shoulders with a smile.

In the current market, a five-star one-bedroom apartment in Dubai Marina Phase 1 (where all the cafés and restaurants are) will rent for approximately Dh95,000 per year if unfurnished.

The same property can fetch up to Dh235,000 a year if rented out furnished on short-term basis. After deducting the 20 per cent agency commission plus about Dh40,000 for the furnishing and approximately Dh8,000 a year for the utility bills, this will leave the owner with a net of Dh142,000 (on an occupancy rate of 79 per cent).

The numbers speak for themselves. However, it is important to remember that where there are good returns there is also a certain risk.

Many will agree that the most delicate figure of the above calculation is the occupancy rate, which cannot be guaranteed in any property short-term rental management contract.

Keeping the above consideration in mind, you might wish to engage an agent for your short-term rental requirements. It would be wise to commit for an initial trial period of maximum six months.

This period will allow you to gather enough details and a good idea about the reliability and actual potential of the agent/marketer you are dealing with.

Should you rather get more hands-on with the business, you could opt for a non-exclusive marketing agreement. You will be able to market your property through other agents/marketers and potentially increase your exposure.

This is not necessarily the optimum solution. In fact, many agents will give priority to the properties of those clients with whom they are contractually committed.

Alessandro D'Ubaldo was the founder and Managing Director of Dubaldo Real Estate Broker, which managed around forty furnished residences for short stays in Dubai from 2005, before the advent of platforms like Airbnb. He is a senior hospitality executive with over 20 years of experience in the GCC.

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Serviced Business Calls for Careful Research

The lodging industry is revealing itself as the golden fruit of the country's real estate developments and extensive marketing. Although the number of players entering the market is growing, there are still numerous opportunities available for further successful entries. And thanks to the lodging industry's recent performance and medium-term outlook, financing for development of serviced apartments is becoming more readily available.

The serviced apartments category has been doing consistently well meeting the needs of corporate executives and travelers alike with a good combination of short- and medium-term rentals.

Speculative hoteliers are taking advantage of the market, pushing rates to new height. There seem to be no under-performing property on the Dubai market and it has reached a point where it is reasonable to consider converting a residential property into a commercial one.

While pursuing serviced apartment's construction or lease seems like a good investment, there is a fair chance that yours might not be the only one. While the overview for the project might look good today, given current market conditions, five more similar projects planned for the same market may turn such a forecast into a different sort of reality.

The following questions, and actions, may be worth taking into consideration prior to making a decision to build or lease: What is the proposed supply of such developments in the area? What is the likely launch schedule for these?

Remember, existing accommodation providers are likely to put up a battle, including lowering their rates substantially, to keep their clients away from the new properties. In any case, the lodging industry will undoubtedly continue to be an exciting market over the next few years, with plenty of opportunities for hotel and hotel apartment investments.

A small-sized building of two to five floors or a compound of villas close to the beach could be the right step to begin with. If supported by a solid management and marketing plan, a tiny development could result in a large enough triumph.

Remember that not all successful projects have to be gigantic. A small property will most likely be perceived by guests as cozy and private. In Dubai a market gap can be identified for small sized projects in the three- or four-star category where the potential for successful new entries is tangible.

For those new investors looking to explore the serviced apartments business it is advisable to place a solid emphasis on careful market research so that strategic plans can be developed to track both expenditure and prospective results.

These strategies could incorporate industry networking, database utilisation, telemarketing, Internet visibility and interaction, and media design and promotions.

It is also essential to identify and appoint a management and marketing company for the property which will professionally look after all aspects related to the set up and running of the business. This could vary from the recruiting and training of staff to the daily management and marketing requirements, in addition to developing a brand building and awareness programme.

A tiny project will not be of any interest for those huge and well established international franchises. However it can be very attractive for those management and marketing companies who are looking to enter the Dubai market in gradual steps bringing along their solid overseas experience and business relationships.

Alessandro D'Ubaldo was the founder and Managing Director of Dubaldo Real Estate Broker, which managed around forty furnished residences for short stays in Dubai from 2005, before the advent of platforms like Airbnb. He is a senior hospitality executive with over 20 years of experience in the GCC.

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