A buoyant tourism market coupled with a range of beneﬁts makes the ownership of a hospitality unit in Dubai attractive for individual investors seeking an alternative income option.
The hospitality sector in Dubai is ﬂourishing. A growing number of international hotel developers and hospitality companies are making inroads into the emirate with a full portfolio of offerings – luxury, midscale, budget, you name it. The industry is riding the waves of a robust travel and tourism sector, which is only expected to beneﬁt further from upcoming headliner events such as Expo 2020 Dubai.
Last year alone, Dubai welcomed 14.9 million overnight visitors and the aim is to reach an annual target of 20 million visitors by 2020. All in all, the prospects are bright for a truly buoyant hospitality market driven by international visitor spending as well as inter-regional tourism.
Traditionally, hotel owners and large investors have been considered the biggest beneﬁciaries of this upswing in activity. Welcome to 2017! The power of ﬂexible investments now also lies in the hands of individual investors looking to set aside smaller chunks of their capital for asset allocation. Take, for example, the option to invest in a hotel room offered by DAMAC Properties, one of
the few leading developers in the region so far to introduce an investment class of this kind. From higher returns on investments to a number of ownership beneﬁts – purchasing a hospitality unit in Dubai makes the option an attractive way to generate alternate income.
Relatively Higher ROIs
Rental yields in Dubai continue to be among the highest in the world and surpass markets such as India, Hong Kong and London. Further, Dubai’s strategy to attract more visitors is only strengthening its position on the world map. These factors together have contributed to high volumes of tourist arrivals year after year – resulting in high occupancy levels at hotels. Hotel rooms enjoy even higher returns and reap the highest yields within the real estate investment class.
Allocation Don’t put all eggs in one basket is perhaps one of the oldest and enduring pieces of advice given to investors. Asset allocation or distributing your portfolio in various investment types minimises the risk quotient, thereby pro
viding more peace of mind. Investing in a hotel room requires a relatively smaller capital allocation, providing an attractive means to diversify your portfolio.
Premium Ownership Beneﬁts
Investing in a luxury serviced hotel room opens doors to a range of exclusive lifestyle beneﬁts. For starters, owners can experience hospitality-inspired living in a premium hotel any time of the year. For example, at any of the properties operated by DAMAC Hotels & Resorts, owners can use their rooms for two weeks a year for personal use including one week during peak season with a number of personalized services including limousine booking – at market competitive rates, their preferred food inside their rooms, required set temperature prior to their arrival, and many more.
Hassle-free Management Worried about the management hassles associated with investing in a hospitality unit? Don’t, because there aren’t any. A hospitality developer like DAMAC Hotels & Resorts will not only take care of the maintenance of your
investment under its unique rental pool system, but also manage it on your behalf – from looking after sourcing tenants to collecting rent.
Considering the everincreasing tourism volumes and high demand for hotels, investing in a hotel room also means owners can expect fast returns. At DAMAC Hotels & Resorts, investors enjoy pay out of revenues generated from their unit, at regular intervals during the year, starting immediately after placing their units in the rental pool.
The author is Niall McLoughlin, Senior Vice President, DAMAC Properties