Hotel room investment provides investors with the opportunity to profit from the success of some of the world’s leading hotel brands and tourist destinations. It is particularly popular in Dubai, thanks to the emirate’s continuing ability to attract an ever-growing number of visitors and the success that this has brought to hotels located within the city. Now seen by many as a viable and lucrative alternative to traditional buy-to-let residential property investment, the question is: Is hotel room investment right for you?
According to Jones Lang LaSalle, global hotel investment volumes reached more than $40 billion in the first three quarters of last year alone, which is the highest figure seen in seven years.
One of the main benefits in undertaking hotel room investment is that the investor’s room is effectively fully marketed by the hotel operator. The hotel brings in the occupiers, with the strong appeal of global hotel brands often resulting in high occupancy and average per-room rates.
With hotel room investment there is also no need to worry about property maintenance as it is usually already covered in the investment, leaving the investor to enjoy a hassle-free investment.
As well as receiving revenue on the hotel room, there is an opportunity to sell the room in the future for capital gains. An added bonus is that the investor is normally allowed to stay in the hotel room themselves for a certain number of days per year, providing the investor with a home away from home.
Hotel room investment is booming within the emirate, largely thanks to the phenomenal success of Dubai as a tourist destination. As well as drawing in vacationers, Dubai’s growing importance as a business destination means that visitor numbers have been growing at a phenomenal rate over the last few years. This has translated directly into Dubai’s hotels posting strong performances, with occupancy rates consistently reaching the 80 per cent mark. In addition, many new developments are popping up over Dubai, thus providing those considering hotel room investment with an ever-wider choice of potentially lucrative investment opportunities. Thousands of new hotel rooms are to be built in Dubai over the next few years as Dubai bids to keep up with the growing demand that has seen visitor numbers reach record-breaking levels.