Buying and Leasing Hotel Apartments - All You Need to Know

Hotel Room Key

More and more investors are choosing to buy or lease hotel apartments in Dubai’s booming hotel industry. After an investor buys a hotel apartment, the hotel management leases it on their behalf and duly shares the earned returns with them, from renting out the hotel room.

Making a hotel investment in Dubai is becoming increasingly popular among foreign investors. It is the preferred choice for many because known hotels do not often get affected by shifts in the economy, thus making them a secure option to protect the investor’s money as they diversify their investment portfolio.

What it Means to Buy and Lease Hotel Apartments

It was almost 100 years ago that the first commercial airline took off. Now, travelling has become an essential element in millions of lives, who pass by the Middle East’s business hub, Dubai, hosting the world’s busiest airport for international travel. 

Everyone planning a trip needs a place to stay, and this is where hotels join in to provide a vital service to Dubai tourists who are increasing in number year on year.  

Due to these factors, the hotel property investment market is a growing one. A hotel investment provides the prestige of owning a luxury hotel property, receiving free night stays, and often, other privileges. More importantly, investors seek out the expected returns.

It provides investors a peace of mind on mundane and overlooked matters when it comes to other property investments. These include cleaning, services, cooking, booking, leasing, marketing, advertising and any other tasks that may be involved in owning a residential property.

Instead, a management company works on keeping the hotel room occupied, and in Dubai it marks itself a popular investment choice to get passive income in a steadily growing industry and economy.

Steps to Buying a Hotel Room

A hotel property, unlike a residential property, is managed by a specialist team. Therefore, a hotel investment is considered hassle-free in comparison to other types of investments.

The hotel unit is fully furnished, managed and serviced, whilst additionally providing the investor a share of the revenue.

Making a hotel investment is relatively simple. The general steps are to research, buy the hotel apartment, and expect tangible returns.

Research is important, and it involves choosing an in-demand location as well as a reputable hotel management company.

Investors are advised to buy and lease hotel apartments in popular areas such as Jumeirah, Business Bay, Dubai Marina, and other flourishing areas of the city experiencing growth. These locations are usually in demand throughout the year as they are located nearby business offices and famous landmarks.

Buying a hotel apartment with a reputable hotel brand and management company is another key factor to making a safe investment. This is because these hotels rarely face low occupancy rates in metropolitan cities such as Dubai.

Facts and Figures

Buying a hotel room in Dubai means investing in the tourism and hospitality industry, which is experiencing exceptional growth.

Before 2002, only UAE nationals could own property in Dubai, but after a decree to allow non-nationals to reap the benefits, real estate in the UAE has seen a major shift and a property boom.

According to Dubai’s Tourism Vision for 2020, 20 million annual visitors are expected by 2020, resulting in tremendous growth for Dubai’s hotel sector. It is currently ranked the 6th most visited city according to the World Economic Forum.

The contribution of the travel and tourism industry to the UAE’s GDP is forecasted to rise by 5.4% annually from 2016 to 2026. This means that the country is expecting even more significant growth in the years to come.

Home to the world’s busiest international airport, Dubai is among the world’s fastest growing cities in buying or leasing, with the number of visitors and residents on a continual rise, boasting of excellent infrastructure and one of the highest standards of living worldwide.

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