Dubai’s holiday home operators take on Emaar
Holiday home operators with apartments at the Downtown are once again engaged in a tussle with Emaar, over a new requirement the developer is insisting on.
If they don’t, these businesses will not be allowed to lease out units for short stays at any of the apartment towers in the Downtown built by Emaar. “Essentially, Emaar is asking for a waiver of all rights held by a holiday home management company,” said Vinayak Mahtani, CEO of bnbme.
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Now, here’s the catch that has caught these businesses off-guard — only if they sign up will they be granted move-in permits for visitors to these buildings. This is a draconian move.
“If we refuse to sign, then there is no option to prepare a move-in permit,” said Mahtani. “Holiday homes have had to endure cancellations during this peak period because of this. We are willing to engage in any talks with Emaar to sort out this latest issue — but so far, they have not reciprocated.
“With the New Year right around the corner, it’s turning out to be a mess for the holiday home industry in Dubai.”
Currently, the rules on holiday home lets are pretty straightforward. The Department of Tourism & Commerce Marketing (DTCM) is the sole entity that can issue licenses and oversee holiday home operators in the emirate. And operators enter into direct dealings with the landlord of the unit being put up for lease and that’s about it. Developers, even master-developers, do not come into the picture.
Unilateral
According to an industry source: “Emaar developed its own terms and conditions [T&C] that holiday home operators must sign — otherwise Emaar Community Management [ECM] has instructed security in the buildings to block all the guests coming into the apartments authorised to operate by DTCM.
“The problem with the T&Cs are many — if any holiday home operator would sign the T&Cs they would lose the right operate the unit in case Emaar decides to stop the particular unit and without any chance for damage compensation.
“So, not only is ECM taking away the rights from holiday home operators granted to them by DTCM, they are also trying to take rights of the DTCM authority itself."
Downtown is central
The Downtown is one of three prime destinations for holiday homes in Dubai, the Palm and Marina being the others. With its next-door status to the Burj Khalifa and all the actions the city has marked out for the New Year, the Downtown figures prominently in the plans of any visitor to Dubai over the next two to three weeks.
Now, if Emaar holds firm with its new clause, holiday home operators are effectively being shut out of prime-time opportunities. Thankfully, for these businesses, the developer is insisting on the clause at their own buildings and not at those built by other developers.
But it wasn’t like this with an earlier attempt.
September shock
Emaar had in September sent out a directive asking all holiday home operators to cease their activities at the Downtown, irrespective of which building they had their units in. After a two-week standoff, Dubai’s Department of Tourism and Commerce Marketing (DTCM), the government agency responsible for all holiday home activities, including licensing, informed businesses that the Emaar directive will not apply.
According to the industry source, “Emaar’s T&C are just a more subtle way to ban holiday homes from Emaar’s operated properties. After Emaar Community Management was ordered by the Supreme Legislative Committee that they cannot ban the holiday homes, Emaar came up with the idea on how to ban the holiday homes in a more secret way — one by one.”
At the Downtown, the building security is stopping guests for “units that do not have the issued move-in permit from Emaar”. “This is ruining the holidays of tourists coming to Dubai and damaging the holiday homes operators reputation and financials,” said the source.
All of which will put a dampener on end-of-year prospects. “The October business was a write-off because of what Emaar did in September,” said Mahtani. “But November saw occupancies increase across the board and so did average daily rates. December has been relatively slow, but rates are still holding up.”
Emaar was unavailable for comment at the time of going to press.
Taking up the issue with DTCM
Holiday home operators have once again raised their concerns about the Emaar move to DTCM, the second time in the last four months.
“This is obviously a problem and is unsustainable, and DTCM is working on resolving the matter,” said the industry source.
“Whenever there is a problem with the building security at Downtown, DTCM is sending their inspectors, who have the law enforcement capacity to resolve the situation. When the inspector comes, the security guards obey the law.
“However, what is shocking once the DTCM inspector leaves security starts stopping the guests again. At one of my units, the inspectors had to come eight times — to meet the same security and resolve the issue.”