Dubai: Paul Mallee and Rami Shamaa, co-founders and managing directors at Dubai-based vacation rental property management company Maison Privee, delves into the lessons for navigating the Covid-19 pandemic and searching for pivot points to open up new opportunities to meet shifts in demand.
As Covid-19 struck, many vacation rental companies saw their core markets evaporate overnight. Lockdowns eliminated traditional tourism, much of which has yet to recover.
But there are green shoots – and pivots – called on by agile and fast moving players to boost occupancy and drive positivity in a time of uncertainty. Vacation rentals have been at the forefront of a move to seize emerging market opportunities in the broader hospitality space. Unique luxury properties have quickly become the accommodation of choice for staycationers and residents alike in popular destination markets, such as Dubai. Resilient and progressive operators in this space have positioned themselves as a fully flexible alternative to traditional annual rentals for residents as well as a luxury break away from home for those seeking a different vista and experience. The natural seclusion of vacation rentals; stand-alone properties with private pools and beaches or low footfall residential developments have become ‘the new way to stay’.
Given the shift in the tourism market, operators with a heavy reliance on inbound tourism have looked to pivot their business model away from sole reliance on tourism. The uptake has been swift as an alternative to long lease for residence, as well as the opportunity to stay different for in country vacationers driving demand. For vacant property owners across cities like Dubai, there is now an obvious rush to understand this market better and to leverage the capability of vacation rental operators to generate higher returns on their investment.
Once such operator leading the charge in this space is Maison Privee, a leading Dubai-based short-term rental operator. Online booking sites which have historically delivered 55 per cent of Maison Privee bookings fell to five per cent of bookings over the March to July 2020 period. The company quickly leveraged its direct booking channels to find new markets and guests seeking extended stays. A ‘pay as you stay’ model was adopted, allowing flexibility for guests in terms of booking duration while also offering a simple, single payment to secure fully furnished accommodation, inclusive of utility bills and services. The demand for in-country vacations also soared and their ability to offer beach front properties with the natural seclusion of the residential property type, ensured bookings accelerated.
While hotels are suffering from the reluctance of guests to stay in large busy properties, vacation rentals have seized the opportunity to fill the accommodation void. The broader hospitality market in Dubai has, of course, been heavily impacted during the Covid months. With up to 200 hotels being closed down during the period, the market has a lot of ground to recover to exit the year with any sense of confidence. As the borders have begun to open up, the return of travellers has been welcomed in the city. It will of course be a gentle upward curve in returning to historic visitor levels but the journey must begin in earnest to reignite revenues.
The clear lesson here is that adaptability and agility in times of economic flux are key to resilience. Continuing on the same path when the market has shifted has a sense of inevitability to it – and for the nascent vacation rental sector not an option. Those that can pivot must do so in order to navigate the current climate and come out the other side ready for growth. Many in the vacation rental space see travel patterns aligning with their offering even more strongly going forward and are expecting their share of the overall hospitality market to increase dramatically. While the size of the pie may have reduced in the short term, the vacation rental share of that pie will increase.
And for Maison Privee, the pivot has worked – with an average occupancy exceeding 75 per cent over the past six months, achieving 93 per cent on average over the past three months in its villa product particularly, as the trend toward short stay vacation rentals grow. The company expects to again double its portfolio and revenues over the next twelve months as this growth continues to gain momentum. Not only has the business retained its complement of employees during the pandemic but it is actively recruiting for key positions to meet its growth plans.
The key learning in the vacation rental space has been to focus on direct distribution channels; growing partnerships with luxury travel agents, concierge companies, tour operators and corporates. The application of this refined model in other markets is clear and for companies like Maison Privee, actively assessing opportunities both in the region and internationally to accelerate growth is top of the strategic agenda. The new travel market is ripe for vacation rentals. Indeed, a good news story in times of uncertainty for the hospitality industry globally.