dubai’s holiday home market · 2017. 9. 11. · a quick history of the high jump dubai’s...
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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
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
WESTERN ROLL1930
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
WESTERN ROLL1930
STRADDLE1956
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
WESTERN ROLL1930
STRADDLE1956
FOSBURY FLOP1968
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
WESTERN ROLL1930
STRADDLE1956
FOSBURY FLOP1968
RIDICULE ANGER CHEAT ADOPT
Traditional and peer-to-peer
DUBAI’S HOLIDAY HOME MARKET
Traditional mode of business Peer-to-peer equivalent
Various
Dating
Fundingequity invest
Transport
Lodginghotels
Domestic Chores
Data never sleeps
DUBAI’S HOLIDAY HOME MARKET
5.0 EXABYTES(5 billion GB) of data produced between
dawn of civilization and 2003
Data never sleeps
DUBAI’S HOLIDAY HOME MARKET
5.0 EXABYTES(5 billion GB) of data produced between
dawn of civilization and 2003
Currently 2.5 EXABYTES of data is produced on a daily basis
Data never sleeps
DUBAI’S HOLIDAY HOME MARKET
5.0 EXABYTES(5 billion GB) of data produced between
dawn of civilization and 2003
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.
DUBAI’S HOLIDAY HOME MARKET
Airbnb©
To date, tens of millions of travelers have chosen Airbnb to experience cities not as
tourists, but as locals.
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
DUBAI’S HOLIDAY HOME MARKET
Airbnb©
To date, tens of millions of travelers have chosen Airbnb to experience cities not as
tourists, but as locals.
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
DUBAI’S HOLIDAY HOME MARKET
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
DUBAI’S HOLIDAY HOME MARKET
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
DUBAI’S HOLIDAY HOME MARKET
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
DUBAI’S HOLIDAY HOME MARKET
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
DUBAI’S HOLIDAY HOME MARKET
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
DUBAI’S HOLIDAY HOME MARKET
Source: AirDNA
18% 44% 24% 9% 5%
Studio 1 bedroom 2 bedroom
3 bedroom
4bedroom
Common facilities in Dubai’s holiday homes
DUBAI’S HOLIDAY HOME MARKET
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
DUBAI’S HOLIDAY HOME MARKET
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
DUBAI’S HOLIDAY HOME MARKET
Source: AirDNA
17%10-12 months
41%1-3months
20%4-6 months
22%7-9 months
Average Daily Rate (ADR), AED
DUBAI’S HOLIDAY HOME MARKET
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)
DUBAI’S HOLIDAY HOME MARKET
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)
DUBAI’S HOLIDAY HOME MARKET
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
DUBAI’S HOLIDAY HOME MARKET
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
DUBAI’S HOLIDAY HOME MARKET
What is likely to be the government reaction?
DUBAI’S HOLIDAY HOME MARKET
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?
DUBAI’S HOLIDAY HOME MARKET
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
DUBAI’S HOLIDAY HOME MARKET
RIDICULE ANGER
CHEAT ADOPT
• “not a major threat”
• “low-risk” threat to our business
• “it’s always going to be niche”
The reaction to Airbnb
DUBAI’S HOLIDAY HOME MARKET
• “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
The reaction to Airbnb
DUBAI’S HOLIDAY HOME MARKET
• “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
• “They ought to be thinking about regulation and leveling the playing field.”
• Hotels unions are funding organizations to block Airbnb.
CHEAT ADOPT
The reaction to Airbnb
DUBAI’S HOLIDAY HOME MARKET
• “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
• “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