It is no secret that many people have made themselves very wealthy through investing in Dubai’s property. Although the emirate did suffer greatly during the 2008 global property market crisis, the market has recovered exceptionally well since that time, with huge increases in prices over the last few years. But whilst the property market has performed strongly, one sector has arguably out performed it all the way: tourism. With this in mind, hotel room investment has risen in popularity as investors seek to cash in on the booming Dubai tourism industry. So, is it time to “check-in” to hotel room investment?
“It is a fantastic time right now to be part of the property and hospitality sector, particularly here in Dubai, given the pace at which it has recovered from the global downturn. While many cities are still recovering, there is a real buzz surrounding the future of Dubai, particularly since the World Expo 2020 win” says Rob Burns, Chief Operating Officer at The First Group, which is one of Dubai’s leading hotel developers.
Indeed there is little arguing with the fact that both the Dubai property and hospitality sectors are great success stories. Knight Frank’s Global House Price Index showed that residential property prices increased by a whopping 27.7% in the year to March 2014, whilst Dubai has enjoyed growing numbers of tourist visitors over the last few years, which has been great news for Dubai’s hotels.
“The proof is really in the vital stats – 11 million people visited Dubai in 2013, 11 per cent more than the previous year, while hotel occupancy topped an average of more than 80 per cent.* We are really excited and honoured to be a part of it all and look forward to seeing how things will continue to go from strength to strength in the coming years, for both Dubai and The First Group,” says Burns. (SOURCE: Jones Lang La Salle, Dubai Hotel Intelligence Report, 2014)
What is hotel room investment?
Hotel room investment provides investors with the opportunity to purchase a hotel room, with the idea being that they then receive the revenue that is generated from the room each time it is occupied by a guest. In addition, many hotel room investment schemes offer investors the opportunity to stay in their room for a certain number of nights each year.
Why should investors consider hotel room investment?
One of the key advantages of hotel room investment, when compared to traditional property investment, is that there is no hassle to the investor in terms of managing and maintaining the room. It will be fully managed and maintained, meaning that the investor can simply concentrate on receiving revenue from their investment.
In many ways Dubai is the ideal location for people interested in investing in hotel rooms. Dubai’s hotels have extremely high occupancy rates, so investors should receive consistent returns, whilst the future for Dubai looks promising as it heads towards the Dubai World Expo 2020. As an added benefit, investing in Dubai offers the advantage of investing in a safe, locally tax-free environment.