- The global vacation rental market — valued at $22.7 billion in 2020 — will surpass a whopping $111.2 billion by 2030, according to a Precedence Research study late last year.
- The research spoke of a "revenge tourism" trend with millennials and the younger generations driving growth during the first few years after the coronavirus pandemic.
DUBAI, United Arab Emirates — In the Middle East, a new breed of high-end vacation rental firms are scrambling to meet the needs of today's traveler — who has very different preferences post-pandemic.
The global vacation rental market — valued at $22.7 billion in 2020 — will surpass a whopping $111.2 billion by 2030, according to a Precedence Research study late last year. The research spoke of a "revenge tourism" trend with millennials and the younger generations driving growth during the first few years after the coronavirus pandemic.
According to the analysts, this is mainly driven by the rising awareness among travelers on the extra space and comfort offered by vacation rentals, not to mention, in some extreme cases, the "extras" like high-tech gyms, private cinema screens, smart home appliances, as well the services of personal attendants, butlers, and even chefs.
One firm looking to cash in on this is Dubai-based travel agency Luxury Explorers. During the pandemic, the company saw which way the wind was blowing and took a leap into the premium holiday homes business, establishing the Luxury Explorers' Collection in mid-2020.
The firm has properties like Villa Botanica in the exclusive Emirates Hills, often referred to as the "Beverly Hills" of the UAE. Luxury Explorers' Collection CEO Mohammed Sultan told CNBC: "The idea really started in 2018 when we found out some of our VIP clients working with our agency were keen to spend their holidays in luxury vacation homes and villas when they travel around the world."
"At that time Dubai didn't have the level of premium holiday rentals that these clients were experiencing in Southern France, Italy, and Los Angeles — areas which are well developed in terms of short-stay lettings."
"It was then we decided to set our sights on pioneering the local market's evolution by offering high-end properties that are not only visually stunning but at the same time rich with exclusive perks and personalized concierge services."
The company is a notable UAE success story. It has 20 properties in Dubai — mainly big villas in prime locations or swanky apartments in iconic buildings like the soaring Burj Khalifa — and is expanding fast with five properties set to open in Mecca in Saudi Arabia, and one in Abu Dhabi. Its well-heeled clients include the very wealthy, celebrities, sports personalities, and politicians.
Meanwhile, rentals firm Maison Privee has received recognition in the Middle East with its portfolio of luxury villas, penthouses and apartments. Dubai's Deluxe Holiday Homes also reported a 150% increase in its property portfolio last year, despite the pandemic travel lull, and short-term rental operator Kennedy Towers has spoken of solid demand in the region.
The study covered 27 international markets and found that while demand for both hotels and short-term rentals was badly affected by the health crisis, rentals weathered the pandemic better, primarily because of preferences for larger living spaces, full-service amenities, and the need for social distancing.
Leading holiday home companies confirm they have indeed seen consistently high occupancy since the beginning of the pandemic. "We've been averaging 92% since our inception in August 2020," Harrison Moore, managing director at Key View Vacation Homes Rental in Dubai, told CNBC.
He added: "So far in 2022 we have seen a year-on-year increase of 33% on our average daily rate. One of the main drivers for this has been Dubai being one of leading innovators when it comes to safety protocols linked to Covid-19."
Unsurprisingly, major hotel brands have gotten into the vacation rental game. One such venture is Marriott's rental service called Homes & Villas by Marriott International, which now boasts rental homes in over 100 destinations.
Marriott's expansion into this area began after its 2018 pilot project on home rentals, called Tribute Portfolio Homes, revealed that the average guest stay was more than triple that of the typical hotel stay.
On the more budget-friendly side of things, Airbnb has also been doing brisk business in the Middle East for several years, with some Insta-ready homes for rent. These include everything from an ancient riad in Marrakesh — with a courtyard featuring an emerald green pool — to a traditional wooden chalet in the mythic mountains of Lebanon.