DUBAI S HOLIDAY HOME MARKET OCTOBER 2016 HOW THE PEER-TO-PEER SHARING ECONOMY IS SHAPING THE HOSPITALITY SECTOR

Size: px

Start display at page:

Download "DUBAI S HOLIDAY HOME MARKET OCTOBER 2016 HOW THE PEER-TO-PEER SHARING ECONOMY IS SHAPING THE HOSPITALITY SECTOR"

Blaze Hutchinson
6 years ago
Views:

1 OCTOBER 2016 HOW THE PEER-TO-PEER SHARING ECONOMY IS SHAPING THE HOSPITALITY SECTOR

2 A quick history of the high jump STRAIGHT 1700s SCISSORS 1874 EASTERN CUTOFF METRES YEAR

3 A quick history of the high jump STRAIGHT 1700s SCISSORS 1874 EASTERN CUTOFF 1892 WESTERN ROLL METRES YEAR

4 A quick history of the high jump STRAIGHT 1700s SCISSORS 1874 EASTERN CUTOFF 1892 WESTERN ROLL 1930 STRADDLE METRES YEAR

5 A quick history of the high jump STRAIGHT 1700s SCISSORS 1874 EASTERN CUTOFF 1892 WESTERN ROLL 1930 STRADDLE 1956 FOSBURY FLOP METRES YEAR

6 A quick history of the high jump STRAIGHT 1700s SCISSORS 1874 EASTERN CUTOFF 1892 WESTERN ROLL 1930 STRADDLE 1956 FOSBURY FLOP METRES YEAR RIDICULE ANGER CHEAT ADOPT

7 Traditional and peer-to-peer Traditional mode of business Peer-to-peer equivalent Domestic Chores Various Funding equity invest Transport Dating Lodging hotels

8 Data never sleeps 5.0 EXABYTES(5 billion GB) of data produced between dawn of civilization and 2003

9 Data never sleeps 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

10 Data never sleeps 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

12 Airbnb To date, tens of millions of travelers have chosen Airbnb to experience cities not as tourists, but as locals.

13 Airbnb 74% of Airbnb are properties outside the main hotel districts To date, tens of millions of travelers have chosen Airbnb to experience cities not as tourists, but as locals. 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

14 Airbnb 74% of Airbnb are properties outside the main hotel districts To date, tens of millions of travelers have chosen Airbnb to experience cities not as tourists, but as locals. 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

15 Dubai - Supply PALM JUMEIRAH JUMEIRAH BEACH RESIDENCE DUBAI MARINA JUMEIRAH DEIRA MEDIA CITY WORLD TRADE CENTRE AL SUFOUH AL KARAMA JUMEIRAH LAKES TOWERS JEBEL ALI VILLAGE EMIRATES HILLS AL BARSHA JUMEIRAH ISLANDS AL QUOZ BUR DUBAI DUBAI INTERNATIONAL AIRPORT AL QUOZ INDUSTRIAL GARHOUD JUMEIRAH VILLAGE CIRCLE UMM RAMOOL NAD AL SHEBA 1 Highest concentration in hotel districts DUBAI SPORTS CITY DUBAI INVESTMENT PARK MOTOR CITY ARABIAN RANCHES RAS AL KHOR AL RASHIDIYA NAD AL SHEBA RAS AL KHOR INDUSTRIAL AREA MIRDIF AL BARARI AL WARQA 1 REMRAAM CITY OF ARABIA DUBAI SILICON OASIS THE VILLA Source: Knight Frank Research UMM NAHAD AL TWAR DUBAI FESTIVAL CITY ACADEMIC CITY INTERNATIONAL CITY

16 Dubai - Demand PALM JUMEIRAH JUMEIRAH BEACH RESIDENCE DUBAI MARINA JUMEIRAH DEIRA MEDIA CITY WORLD TRADE CENTRE AL SUFOUH JUMEIRAH LAKES TOWERS JEBEL ALI VILLAGE EMIRATES HILLS AL KARAMA Higher proportion of individuals AL QUOZ seeking INDUSTRIAL daily contracts AL BARSHA JUMEIRAH ISLANDS JUMEIRAH VILLAGE CIRCLE AL QUOZ DUBAI INTERNATIONAL AIRPORT Higher GARHOUD proportion of UMM RAMOOL AL TWAR individuals DUBAI FESTIVAL NAD AL SHEBA 1 seeking monthly CITY RAS AL KHOR contracts AL RASHIDIYA DUBAI SPORTS CITY DUBAI INVESTMENT PARK BUR DUBAI MOTOR CITY NAD AL SHEBA ARABIAN RANCHES RAS AL KHOR INDUSTRIAL AREA MIRDIF AL BARARI AL WARQA 1 REMRAAM CITY OF ARABIA DUBAI SILICON OASIS THE VILLA Source: Knight Frank Research UMM NAHAD ACADEMIC CITY INTERNATIONAL CITY

17 The evolution of Dubai s holiday home supply Relaxation of legislation 4,200 units Initial legislation 2,100 units 2 units 12 units 92 units 248 units 657 units July 2016 Source: AirDNA

18 Regional performance Average hotel price Average Airbnb price (1BR Equivalent) NEW YORK 245 BERLIN AMSTERDAM LONDON CHICAGO LOS ANGELES PARIS DUBAI SYDNEY Source: Various

19 The composition of supply 18% 44% 24% 9% 5% Studio 1 bedroom 2 bedroom 3 bedroom 4bedroom Source: AirDNA

20 Common facilities in Dubai s holiday homes 92 % 90 % 83 % 83 % 74 % 71 % 61 % 30 % 17 % 8 % 9 % Kitchen WiFi Washer/ Dryer Pool Gym Free Parking Cable TV Hot tub Smoking Pets Breakfast Source: AirDNA

21 Holiday home median occupancy levels, % JAN 59% FEB 54% MAR 47% APR 42% MAY 37% JUN 29% JUL 43% AUG 42% SEP 48% OCT 53% NOV 39% DEC Source: AirDNA

22 Months available annually 17% months 41% 1-3months 22% 7-9 months 20% 4-6 months Source: AirDNA

23 Average Daily Rate (ADR), AED % 27% 18% 20% 17% NOV 2015 DEC 2015 JAN 2016 FEB 2016 MAR % 33% 56% 49% APR 2016 MAY 2016 JUN 2016 JUL 2016 Source: AirDNA, STR Global Holiday homes Hotels Premium value

24 Holiday home RevPAR performance (January 2015 June 2016) 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 JAN 2015 FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN 2016 FEB MAR APR MAY JUN JUL Source: AirDNA, STR Global, Knight Frank Research Studio 1BR 2BR 3BR Hotels

25 Holiday home RevPAR performance (January 2015 June 2016) 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 JAN 2015 FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN 2016 FEB MAR APR MAY JUN JUL Source: AirDNA, STR Global, Knight Frank Research Studio 1BR 2BR 3BR Hotels

26 Who is most severely impacted? More affordable hotels Leisure oriented hotels Hotels with fewer facilities Unbranded hotels

27 Who is most severely impacted? More affordable hotels Main hotel districts such as Downtown, Palm Jumeirah, Dubai Marina and JBR Leisure oriented hotels Serviced apartment sector targeting long stay guests downtown Hotels with fewer facilities Highly seasonal submarkets that cannot yield as effectively during peak periods Unbranded hotels All hotels during low season

28 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

29 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 AED AVERAGE RATE POTENTIAL HOTEL REVENUE Tax 80 AED Tourism 20 AED POTENTIAL HOLIDAY HOME REVENUE Tourism Dirham 15 AED

30 The reaction to Airbnb RIDICULE ANGER not a major threat low-risk threat to our business it s always going to be niche CHEAT ADOPT

31 The reaction to Airbnb RIDICULE ANGER not a major threat low-risk threat to our business it s always going to be niche New York premium rentals are being charged in affordable areas Demonstrations in Venice CHEAT ADOPT

32 The reaction to Airbnb RIDICULE ANGER not a major threat low-risk threat to our business it s always going to be niche New York premium rentals are being charged in affordable areas Demonstrations in Venice CHEAT ADOPT They ought to be thinking about regulation and leveling the playing field. Hotels unions are funding organizations to block Airbnb.

33 The reaction to Airbnb RIDICULE ANGER not a major threat low-risk threat to our business it s always going to be niche New York premium rentals are being charged in affordable areas Demonstrations in Venice CHEAT ADOPT They ought to be thinking about regulation and leveling the playing field. Hotels unions are funding organizations to block Airbnb. AccorHotels with Onefinestay Wyndham Hotels with LoveHomeSwap Push of lifestyle hotels

34 THANK YOU

WELCOME TO THE MAG FAMILY

WELCOME TO THE MAG FAMILY It is my pleasure to present to you our upscale residential tower, MAG 230, in the heart of Dubailand City of Arabia. The luxury residences have been designed for maximum comfort