Kuwait’s IFA Hotel Investments has expanded into the increasingly regulated holiday homes market in Dubai following a tie-up with the British hotel management company Bespoke Hotels International.
The Bespoke Residences brand will be among the first international brands to enter Dubai’s holiday homes segment, according to the company.
Until the introduction of new regulations from the Dubai government in 2014, the holiday homes sector was largely unpenetrated by big developers such as IFA because it was unregulated, according to an IFA spokesman.
“Moreover, it is something our [apartment] owners have been looking for themselves to get into legitimately,” he said. “And we see this as a growth sector, in line with the growing tourist market and creating a different category of clients.”
IFA was awarded its holiday home licence last year, and has more than 100 properties registered, including homeowners in IFA projects and a few outside.
The deal with Bespoke would allow the property owners to market their properties beyond the UAE given the network of hotels and holiday homes from the British company.
Bespoke manages 81 properties worldwide, including the UAE, India and Australia, besides more than 100 in the UK. In the UAE, it manages two properties on the Palm Jumeirah that involve 281 apartments at the IFA Hotels and Resorts North Residences adjacent to Fairmont the Palm Hotel, and 132 Shoreline apartments branded as Palm Residences. Internationally, it manages the largest number of properties in India with 56 properties.
Under the deal, Bespoke will also manage a 103-unit serviced apartment component at IFA Hotels and Resorts’ Balqis Residence on Palm Jumeirah. IFA Hotels and Resorts has 3,000 units in Dubai, and is a mix of residence, serviced apartments and holiday homes from IFA projects.
The holiday homes market in Dubai is increasingly regulated to provide transparency, safety and standardisation, according to Dubai’s tourism agency. Last month, Dubai Tourism said it had licensed 57 operators and registered more than 1,600 properties.
Homeowners who want to rent their apartments or villas for short-term lettings need to register with a Dubai Tourism licensed operator.
Dubai Tourism is expected to regularly inspect the registered homes, which are classified as standard or deluxe.
In 2014, Dubai Tourism said it required hospitality operators with 20 or more residential properties that are used as holiday homes to have business licences. Homeowners can also apply to become licensed operators.
“These regulations empower building management companies, developers and home associations to be an active player in ensuring the quality of Dubai’s holiday home offering,” said Khalid bin Touq, the executive director for licensing and classification sector at Dubai Tourism.
The regulations are an effort to standardise the market segment as Dubai looks to increase its room count and broaden the hotel offerings ahead of an expected surge of tourists for Expo 2020.
The recent addition of new rooms has pulled down room rates in Dubai, which have been among the highest in the world.
In February, Dubai hotels registered a 3.5 per cent decrease in occupancy to 82.5 per cent year-on-year, according to the research company STR Global. The average room rate fell by 11.6 per cent to Dh833.78.
IFA Hotel Investments is a part of IFA Hotels and Resorts and has 19 properties worldwide. It works with hotel brands such as Yotel, Movenpick, Fairmont, Four Seasons and Starwood.
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