Despite the Covid-19 pandemic, Dubai has remained one of the top tourist destinations in the world thanks to a successful vaccination drive, open borders, and the feeling of normalcy in the emirate – relative to the rest of the world where lockdowns are still common practice. Because of this, Dubai’s holiday home market has started to pop off, with tourists, Expo 2020 attendees, digital nomads, and business travelers seeking an experience away from restrictions in their home countries. Now with the Omicron variant wreaking havoc across much of the world, many are asking, how will this hurt the Dubai tourism, real estate, and holiday home markets?
The answer: it will but not by much, and not for too long. The UAE is unlikely to impose any strict restrictions as the majority of the population has already been vaccinated. Moreover, with the booster drive well underway to combat the Omicron variant, it’s unlikely that any major restrictions or lockdowns will be put in place in Dubai. At the same time last year, Dubai actually had harsher restrictions in place, like limitations in restaurants and in leisure spots capacities. The city is currently at its most open than at any point during the pandemic, placing among the lowest in terms of restriction measures in the Covid-19 Stringency Index in the Middle East.
What does it mean for the Dubai holiday home market?
The UAE is, for the most part, open to the rest of the world for travel, barring select African countries that are currently combatting the Omicron variant like Namibia, South Africa, and Botswana, for example. While major tourism markets from the US, UK, and the rest of Europe are on-track for tighter domestic measures, it’s unlikely that it will translate into international travel restrictions. While the UAE is currently experiencing another Covid-19 wave, with daily cases hovering around 1,000, it’s still far below its peak a year ago at 3,500 daily cases.
How did SmartCrowd’s portfolio fare this time last year?
Looking back at smartcrowd.ae’s holiday home portfolio from December to February, the average occupancy rate is above 80%, with tenants staying for an average of 14 days – and some staying for nearly 2 months! These came from tourists looking to escape the winter season and lockdown restrictions in their home countries, as well as digital nomads wanting to work from abroad – thanks to the UAE’s central location, it’s easy for European and Asian-based workers to stay here.
Remember, during this time, the UAE was added to the UK’s red list in January 2021, which did affect our portfolio and the rest of the Dubai holiday home market as UK tourists and business travelers make up a substantial portion of incoming travelers into the city. Since then, the UAE has been moved to the Amber list – meaning there isn’t a blanket ban on travel to the country, with travelers only needing to provide a negative PCR test before and after travel.
Back then, the UAE wasn’t one of the leading countries in terms of percentage of population vaccinated and far greater restrictions were in place in the country. Today, it’s one of the few places in the world where things have returned to relative normalcy. Plus, it has one of the highest vaccination rates in the world, which will help restrict Covid-19 cases and infection rates in the future. Therefore, it’s unlikely that any major travel restrictions will be put in place either by the UAE government or by foreign countries in the UAE. While there may be a short-term dip in holiday home revenues, it’s likely to recoup those losses quickly, especially during the rest of the winter season that will go until March 2022.
How will Omicron affect Expo 2020?
With Expo 2020 also underway, interest in the UAE will remain high, with tourists and business travelers constantly coming to and from the country over the course of the event. Moreover, there will unlikely be any large-scale restrictions in place over the course of the event. Measures have already been put in place to provide more PCR testing capabilities on the site and major parades have been postponed or canceled to avoid major crowds, however, the pavilions, concerts, restaurants, and conferences still remain open.
Omicron is going to affect international travel and tourism in the short term. There’s no disputing it, but the UAE has proven to be resilient to major variant outbreaks, as seen with the Delta strain. Tourism and in-coming travel have consistently increased over the course of the pandemic and look to continue into the new year, despite the previous Covid-19 global peak and the ongoing Omicron boom. While travel bans have been put in place by the UAE, it has primarily been in areas that aren’t major Dubai tourism market segments. With many more months left in the winter season, holiday home investors have plenty of more time to benefit from the holiday season!