(MENAFN- Khaleej Times) Holiday home operators in Dubai are facing uncertainty as the deadline given by Emaar Properties to cease their operations in Downtown Dubai expires today but no consensus evolved at a meeting with the authorities concerned, Khaleej Times has learnt.
The short-term market players said ambiguity and indecisive policies will hurt investor sentiments as Emaar refuses to either extend the September 19 deadline for holiday home rentals or withdraw the same.
Industry sources said the operators did meet the authorities on Wednesday and were expecting an outcome to the controversy.
"We are ready for an amicable solution, but Emaar stick to its stance," according to a source who attended the meeting.
The operators said they are hounded by their clients who had booking in Downtown Dubai and are now looking for alternative accommodations.
"Ease by Emaar will not list properties in Downtown Dubai for home stays from September 19. This is as part of our decision not to offer holiday home operations in Downtown Dubai following requests from our residents, as several of the holiday homes were used for non-residential and non-family-related activities," said a statement from Emaar to Khaleej Times.
The industry, which is set to welcome 25 million visitors by 2020, is outraged by the fact that despite a clarification from Dubai Tourism, the regulator, there was no response from Emaar. Repeated attempts to get comments from Dubai Tourism and Emaar remained futile.
"I do believe that such a decision will hinder the progress of the holiday homes sector in Dubai, considering the market share of Downtown Dubai," said Mohamad Shams, managing director, fm living.
Active listings in Dubai last year hit 10,766 properties of which entire homes reached 6,568 units, private rooms touched 3,337 and shared room touched 861. During the last 5 years, a rise in the number of vacation rentals shot up by 15.4 per cent as Dubai tourist arrivals jumped 20.6 per cent. It is reported that short-term rental homes in Downtown Dubai are around 1,000 units.
"I do anticipate major operator losses coupled along with the uncertainty that will prompt holiday home operators and businesses to think twice about investing in the community in general. I suppose such strategic matters pertaining to holiday home fundamentals must be discussed in advance with all concerned parties such as property developers, Dubai Tourism and holiday home operators and then work constructively together to find an appropriate course of action that is best for the community.
"When we think about this from the end users perspective, it's such an inconvenience to think of alternatives to Downtown Dubai, not to forget the repercussions such a decision would bring about in the retail, food and beverages sectors. We at fm living will continue looking at alternatives to expand the business ensuring best customer experience to Dubai visitors," Shams said.
Sarah Bacon, founder, WeShareProperty, said the sharing economy is here to stay."Whether for accommodation, or work or office space; these industries are now part of our daily lives," she said.
Bacon said the decision by Emaar to restrict approved, regulated short-term letting companies is not only trying to turn back the clock on the inevitable, it couldn't come at a worse time for increased volatility within the real estate industry.
"The short-term letting market is good for investors to have alternatives to make their investment more attractive. It is good for consumers who benefit from more competition, lower prices and boosts tourism. With the Expo around the corner, it is the short-term letting market that has enormous potential to bring benefits across the economy by providing competitively priced accommodation to the masses.
IBC Group recently tied up with Berkshire Hathaway HomeServices Gulf Properties to acquire 10,000 premier properties in Dubai, to furnish and manage as holiday homes. The group's subsidiary, Gallery Suites Vacation Rentals, joined hands with OYO Rooms for a deal valued at $5billion (Dh18 billion) to furnish and manage 10,000 premier holiday homes in Dubai.
Khurram Shroff, chairman IBC Group & Gallery Suites, said Dubai walks the talk and any kind of ambiguity does not bode well for the investors whether long-term or short-term.
"The emirate is a global hub and a gateway to Mena region, investors surely seek holiday homes on short-term rentals basis. The on-going policy stand taken by Emaar has surely impacted operators who on one hand have undertaken bookings and on other hand have to deal with sudden policy changes," he said.
He said the short-term rental market is a burgeoning segment of the Dubai economy, which is supporting the Dubai government's agenda of expanding tourism further and making Dubai the destination of choice for visitors.
"At such a time, ambiguity can be disconcerting for investors," he said.
Shroff added that with preparation of Expo2020 Dubai on track global corporates have already started moving their staff to the UAE."Most pavilions have started the work and are on track. The employees of global corporates go for high-end communities and any denial or restriction on home rentals is surely bound to raise eyebrows," Shroff concluded.
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Sandhya D'Mello
Journalist. Period. My interests are Economics, Finance and Information Technology. Prior to joining Khaleej Times, I have worked with some leading publications in India, including the Economic Times.
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