DUBAI: It is not just holidaymakers that have contributed to the boom in the luxury holiday-home market. Foreign businesses are operating out of short-term rental villas, said Mohammed Sultan, founder and CEO of Luxury Explorers Collection, who has been helping them.
Sultan is a veteran of the luxury hospitality industry, specializing in high-level conferences and VIP travel arrangements since 2004. But when the pandemic hit — essentially bringing events and travel to a halt — he had to shift his strategy quickly.
His company spotted an urgent need in the market for short-term, high-end vacation rentals. So, in June 2020, mere months after COVID-19 swept the world, Luxury Holiday Homes was established.
The majority of the company’s clients are from Europe and Asia, mainly China. These are not typical digital nomads; they are high-profile men and women who see the appeal of doing business in Dubai.
Compared to the restrictive COVID-19 measures in many of Asia’s main cities and the current war in Eastern Europe, Dubai has become a safe halfway house for businesses to operate.
“Since the pandemic, China has been our biggest market,” Sultan told Arab News.
“We see a lot of high-net-worth individuals moving their business and bringing staff members to operate out of a villa in Dubai, besides the influx of Russian businessmen holidaying in Dubai and investing here. They need a base, so they use our ultra-luxury properties to discover the market and feel settled,” he added.
Luxury in demand
The global vacation rental market is expected to reach $111.2 billion by 2030, according to a 2021 Precedence Research study. The ultra-luxury market, however, is more nuanced.
In addition to beautifully decorated properties, often in desired destinations such as the exclusive Emirates Hills area or a penthouse in Downtown Dubai, there are amenities on offer that wealthy clients demand.
Private chefs, butler services and high-end toiletries are expected. The company operates 20 properties in Dubai and five in Makkah. The three-bedroom unit in Makkah that overlooks the Kaaba is one of the most coveted properties in his scope.
“Most of the hotels in Makkah are old and don’t offer value for money. It’s really hard to find a large three bedroom in Makkah that fits a whole family and overlooks the holy site for prayers,” said Sultan. “It’s a spiritual experience.”
In Dubai, the company’s properties are spread between Palm Jumeirah, Emirates Hills and Downtown Dubai. The majority of holiday homes have pianos for children to continue lessons. Some come with outdoor cinemas and seaside barbeque areas. Luxury Explorer Collection’s rates per night range from 6,000 dirhams ($1,634) to 65,000 dirhams.
“When we first started with a few properties, guests would call us at odd hours asking how to turn on the gas to cook, so we realized these need to be fully serviced to a high degree,” said Sultan. “We set an impeccable ultra-luxury standard now, and we’ve seen the highest occupancy rates.”
Luxury Holiday Homes is currently planning to expand in Abu Dhabi and Saudi Arabia to cater to rising demand. Riyadh, Jeddah and Dammam are on the radar. In addition, the company will soon be working with a developer to create luxury mansion experiences from scratch within the next two to five years.
“It helped that I worked in the industry and had the right connections. I knew the habits of high-net-worth individuals in the region, so when we saw that hotel bookings were slowing in 2008 and private holiday homes were on the rise, I made a note of the consumer preference and acted when the time was right,” said Sultan.
“Even hotel brands are moving into the short-term rental space,” he added.
Brands such as Marriott International launched Homes & Villas in 2018, encouraging guests to stay for longer periods.
“Hotels are definitely moving into the holiday-homes business. We talk about it at conferences all the time,” said Sultan. “But they have restrictions; we can upgrade easily and quickly; we offer more privacy.”
New data shed fresh insights into traveler habits that he did not anticipate, affecting renovation plans in some cases.
“Our data shows that the more you renovate your bathrooms, the more value you get. We renovated all bathrooms and set aside renovations for secondary bedrooms in villas with 11 bedrooms. It paid off,” he said. “We found out strikingly that revenue increases massively the more you upgrade bathrooms.”
Other preferences include entertainment facilities, including cinemas and sea-facing barbeque areas. As the lines stay blurred between work and home life, having everything you need in one place carries a particular appeal to the luxury travel consumer and business traveler.