UAE tenants save thousands by swapping annual leases for long-term hotel stays

The flexibility, convenience and affordable rates offered by hotel operators appeal to the budget-conscious amid Covid-19 uncertainty

Alan May has been staying at the Radisson Red Dubai Silicon Oasis for the past six months and has no urge to experience the formalities of leasing his own home. Photo: Antonie Robertson / The National

When Alan May moved to Dubai from the UK, he opted for the convenience and cost effectiveness of hotel living until he found his feet.

Six months later, he remains at the Radisson Red Dubai Silicon Oasis with no urge to experience the formalities of leasing his own home.

“The plan was for a circa three to four-month stay, and then look for a rental apartment with two bedrooms … family and friends could visit Dubai anytime and have their own room,” Mr May, 36, recalls.

“My plans changed within a month; the hotel set-up was excellent, the locality to both my workplace and the seven-a-side football I play meant I reevaluated with a view that I would stay in the hotel longer term.”

With no limitations on checking out, Mr May was able to save cash, which would otherwise be swallowed by rent, when he returned home to Scotland for Christmas.

Flexibility could also extend to visits from his partner and their two daughters by utilising one of the hotel’s two-bedroom apartments, or an Airbnb property.

Mr May, an operations manager for a construction company, certainly isn’t alone in his thinking.

Brands such as Premier Inn, Movenpick and domestic names CityMax, Rotana and Rove were among several offering rent-challenging rates last summer as the pandemic brought uncertainty and battered vacation occupancies.

With attractive monthly rates from as low as Dh2,999, numerous residents eschewed rental agreements in favour of long-term hotel stays instead.

Stuart Birkwood opened Radisson Red in Silicon Oasis in February 2020, introducing branded apartments two months later, and now has hotel rooms on long-stay rates “due to demand in the market”.

“Within 60 days, we’d reached close to 80 per cent occupancy in the apartments alone, with 70 per cent of those on long-stay [30-plus days],” the general manager says.

“Covid-19 gave us the perfect opening foundation due to the large number of people looking for a more flexible, affordable and unique hotel apartment offering.”

Radisson Red has guests on contracts ranging from one or three to six months and several on annual contracts. while some occupants even live there with pets.

“We’re their home now,” says Mr Birkwood, who has set rates for all categories.

“But we’re open to, and in these challenging times sympathetic to, assessing what is the best fit for us and our guests … especially those renewing regularly.

“Guests like Alan become a part of the fabric of the building and it’s great to be able to build strong, personal relationships with our long-stay guests.”

Mr Birkwood also confirms this is a useful income thread, especially with fewer business travellers and tourists in the country.

“With opening during Covid-19, this was a key part of our cashflow from day one,” he says.

“It gave us a great base to work up from … enables us to yield our hotel component more aggressively knowing we’ve already got a large slice of contracted business on the books.

“For new arrivals to Dubai or those facing a little uncertainty, having a more flexible long-stay option is the perfect solution.”

Both Mr Birkwood and Mr May highlight “hassle-free” benefits, including WiFi, cleaning services, furnishing as well as regular hotel facilities such as a pool, gym and restaurant with discounts.

Mr May’s research confirmed the financial positives of renting compared with long-stay hotels as “very even”, depending on accommodation size and locality.

“But the pros for matters such as finalisation of bills and landlord deposit make the option with the added convenience and flexibility of a long-stay an attractive solution over rental,” adds the Briton, who recently negotiated Dh300 off his monthly rate having signed a two-month contract for a studio.

With a fridge/freezer, cooking facilities and housekeeping included, he has no plans to alter his living arrangements any time soon.

Ananda Shakespeare lists similar positives. She swapped apartment leasing for hotel living a year ago, having given notice on her Jumeirah Lakes Towers flat to go travelling. She has since moved again for better deals.

Ms Shakespeare’s plan was to visit Asia and Europe during Ramadan and the hot summer months last year before returning to leasing in September.

“Due to the pandemic, that didn’t happen,” says the Briton, who runs PR agency Shakespeare Communications.

Instead of heading to Sri Lanka, she moved into a one-bedroom hotel apartment at Citadines in Barsha Heights, Dubai, for six months.

“I was paying to stay on a weekly basis. I loved the flexibility … it was much easier living in a hotel with a front desk able to take deliveries of meal plans and goods.”

It also allowed the opportunity of a six-week working visit to Zanzibar without burning rental cash on an empty home. She returned to Dubai in January and sought a fresh room deal on finding her previous hotel monthly rate had increased to Dh7,500.

Although Ms Shakespeare hasn’t calculated the exact rental savings of her current arrangement versus her old leased two-bedroom apartment, she’s no longer paying for utilities such as WiFi, air conditioning and cleaning.

“These bills alone were at least Dh2,000 a month,” she says, estimating those savings now total around Dh25,000.

“With the dip in income last summer through the pandemic panic, the savings I made were helpful and I enjoy moving around, getting to know different areas of Dubai.

“Lots of friends have told me they know people who live in Dubai nine months a year and find it cheaper to live in a hotel.”

That’s welcome news for UAE hospitality brands such as Rotana and Rove, both of which had embraced the long-stay market prior to the Covid-19 disruption.

“It’s always been a popular offering for us, although it really gained traction after the beginning of the pandemic,” Paul Bridger, Rove’s corporate director (business head), says.

“Foreseeing the future effects of Covid-19 travel restrictions, we felt that people would focus on finding convenient and affordable hospitality options, and our long-stay options were exactly what the local market needed.”

Multiple Dubai locations, trendy co-working spaces, plus handy factors such as a 24-hour supermarket, free WiFi, plus self-service laundry rooms and regular hotel amenities helped to sustain “high demand” for Rove’s long-stay options.

Mr Bridger says the arrangement is more convenient and often more affordable than renting an apartment, with no long-term commitment, “which is perfect for anyone who doesn’t want to be restricted by a yearly contract”.

While this way of residing evidently thrived during the height of the pandemic and was a boost for many hotels, Rove says some guests have been “living with us for several years”.

"Rovers" staying on a monthly basis represent a “significant percentage” of total occupancy at the moment, with many resident for one to three months, according to Mr Bridger, who doesn’t “expect long-stay options to go away”.

“However, as markets re-open, uncertainty about the future clears up, and tourists start returning to the city, we expect there will be a decrease in the contribution of the long-stay segment.”

All of Rotana’s hotels across the country offer long-stay options, including its 17 Abu Dhabi properties.

The UAE group has always catered to a long-stay segment that represented 20 to 25 per cent of its business mix, according to Amal Harb, corporate vice president of marketing.

“However, with current evolving market needs following the global pandemic, we have witnessed this number increase to 45 to 50 per cent,” she says, adding that Rotana introduced the “all suites” concept in 1997.

This led to its Arjaan Hotel Apartments by Rotana brand and, more recently, Residences by Rotana, designed for longer stays, with guests including families, corporate clients and business travellers.

“Undeniably, following the events of 2020, there has been increased demand for long-stay deals as a viable alternative to renting or leasing,” Ms Harb says.

“However, beyond the pandemic, long-stay deals are also a great choice for guests seeking a smooth transition when relocating or staying for project and contract work.

“The option has always been an important business segment for us, and in a post-Covid landscape, it is particularly advantageous as it represents a guaranteed term of income.”

Certainly, it continues to make sense for Ms Shakespeare who wants to avoid paying rent while away from the UAE.

“When I’m travelling, I’m paying for a flat I’m not using … in the second half of 2019, I was in six countries in six months,” she says.

“Life is very fluid at the moment and it’s hard to make plans. What I’m doing is financially astute and suits my nomadic lifestyle … and [with] the world opening up, being tied down to a flat doesn’t make sense.”

She adds: “This type of living doesn’t suit everyone, but I moved around a lot as a child, so it feels a natural to me.”