In a recent interview with Dubai Eye 103.8 Radio, Oriol Plana, founder of mr.alfred, shed light on how Ramadan impacts Dubai’s short-term rental market. His observations reveal interesting trends and shifts in traveller behaviour during this holy month.
The Change in Weather & Season
Usually, Ramadan leads to a noticeable dip in the hospitality sector, with approximately a 10% decrease in occupancy and a 20% reduction in prices.
However, Oriol points out that this year’s scenario looks more promising:
“This year we are already around 8% to 9% higher in terms of prices compared to last March.“
One key factor contributing to this positive trend is Ramadan’s timing.
Oriol explains, “The thing of Ramadan is that every year it gets two weeks before and before, so it’s closer to the high season in our industry.”
Since this year’s Ramadan falls in a relatively favourable weather condition, Dubai is getting stronger demand than when Ramadan fell during summer months.
The Evolution of the STR Market
Oriol also highlighted significant changes in Dubai’s short-term rental landscape. Here are they in a nutshell:
1. Explosive Market Growth: “Dubai has multiplied by seven in terms of supply of holiday homes since COVID,” Oriol states. This massive expansion has naturally impacted the supply-demand equilibrium and pricing strategies.
2. Shift to “Flexible Accommodation”: Oriol suggests reframing the industry from “short-term rentals” to “flexible accommodation” that caters to varying needs.
“Whether you can accommodate anyone coming for a one-day staycation, one week, up to three months, this is what we’re seeing the demand for.”
3. International vs. Local Demand: While international visitors constitute the primary market, staycations typically represent last-minute bookings: “Usually 1/3 of the bookings are last-minute, meaning the last two-day window.”
Business Travel and Relocations
The interview also touched on the significant influence of business events on occupancy rates.
Oriol mentioned that during Gulf Food Week, they achieved “99.9% occupancy,” highlighting the importance of conferences and events in driving demand.
Additionally, he noted a growing trend of longer stays (one to three months) from people relocating to the UAE, who use short-term rentals as transitional accommodation while searching for permanent housing.
Location and Property Premium
Oriol states that the prices significantly change based on property location and amenities.
Beachside and downtown properties command significantly higher rates—”3 to 4 times more”—than those in residential areas like Jumeirah Business Centre (JBC) and Jumeirah Lakes Towers (JLT).
These premium properties typically offer better amenities, decoration, and larger spaces.
Changing Regional Travel Patterns
An interesting shift is the reduced travel from Saudi Arabian tourists to Dubai during Ramadan.
Oriol reasons this as Saudi Arabia’s growing domestic tourism initiatives:
“They’re staying more in Saudi. There are more elements, the festivals, the food things that happen in Saudi, so there is more local travel.”
Eid’s Impact on Short-Term Rentals in Dubai
Oriol anticipates strong demand from GCC countries during Eid al-Fitr and expects prices to double compared to the last week of Ramadan.
However, he acknowledges fierce competition from hotels during this period, especially for the staycation market:
“Hotels are giving amazing offers for staycations now. If you have the Dubai Emirate ID, I think you have discounts and everything.”
Takeaways In a Nutshell
Dubai’s short-term rental market continues to evolve, and Ramadan’s impact appears to be changing too. With more favourable seasonal timing and growing international demand, the month of Ramadan looks fruitful for the STR market, despite increased supply and regional competition.
For property managers and investors in Dubai’s short-term rental market,
understanding these trends is crucial for optimising pricing strategies and occupancy rates during Ramadan and Eid to get the most out of these periods.
If you want a clear-cut pricing strategy and revenue management service for your vacation rental, feel free to contact us at mr.alfred.
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