Airbnb has seen dramatic growth in Dubai since its launch in the emirate in 2015, with a 421 percent rise in revenues recorded from properties listed on the platform, it has been claimed.
A report by Chestertons MENA (Middle East and North Africa) highlights the growth in popularity of the online platform, which allows homeowners to rent out rooms or entire properties to holidaymakers.
As well as the huge rise in revenues for properties listed on the platform, Chestertons’ study revealed a 161 percent increase (triple-fold) in active listings from 1,241 units to 3,249 between August 2015 and August 2017.
The listings generated over $ 3.3million over the period, the report added.
Chestertons said the relaxation of rules, making it possible for home owners and tenants to cut out a third party agency and list their property directly on to the site, had contributed to the growing popularity of the Airbnb model.
However it added that, rather than competing with Dubai’s hospitality sector, Airbnb is complementing Dubai’s hotel offering within the emirate “by providing an alternative travel experience”.
Average occupancy levels topped 57 percent during Dubai’s peak season – still below average hotel occupancy rates of 70-80 percent for the emirate.
During the low season months of June, July and August this year, Airbnb occupancy levels averaged nearly 40 percent – on a par with performance in the hotel industry, Chestertons said.
Meanwhile, average daily rates (ADR) for listings have retained consistent year-on-year levels since 2015, with prices in August 2015 averaging $ 153, rising to $ 154 in 2016 and again $ 154 in August 2017.
The first three months of 2017 – peak tourism season – witnessed ADRs of $ 226, $ 201 and $ 204 respectively, the report added.
Ivana Gazivoda Vucinic, head of advisory and research at Chestertons MENA, said: “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 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.”
The Dubai Department of Tourism and Commerce Marketing then signed an agreement with Airbnb in May 2016, to further regulate the offerings available and ensure only whole or integral units are marketed.
Gazivoda Vucinic added: “Many real estate investors are diversifying into the holiday home rental market because of the ease in regulations, combined with higher returns – an additional 5 percent return, when compared to the traditional rental market.”