The World Cup kicks off in Qatar on 20 November, and with accommodation in the tiny peninsular country at capacity, football fans are turning to other options, including boarding on cruise ships docked off Doha’s coast or finding a room in Dubai, some 650km away from the action in the United Arab Emirates (UAE).
Dubai World Central Airport will operate up to 120 daily shuttle flights to Doha for fans staying in the UAE. Additional chartered flights will carry yet more fans over the border. Currently, day trips are set to account for 4% of all arrivals in Qatar during the World Cup, 85% of which originate in the UAE, according to data from travel analysis company ForwardKeys.
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Real estate in Dubai spikes for World Cup period
The lack of accommodation in Doha has had an impact on Dubai’s real estate market ahead of the World Cup, with hotels, Airbnb and other short-term let options’ prices and occupancy levels spiking. Some landlords in prime areas are reportedly converting units traditionally offered as long-term leases to short-term lets just for the World Cup.
“Many landlords are converting their leases, especially in [prime areas] downtown and in Business Bay, into short-term rentals,” says Dubai-based property consultant Nayla Noura.
There is no official data on the trend yet, but JP Mondalek, CEO of houza.com, is another who has seen consistent evidence of this change.
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“Over the past 12 months we have witnessed many landlords switching to short-term rentals to take advantage of increasing nightly rates of short-term rental properties, predominantly fuelled by both growing tourism and the anticipation of the World Cup,” he says, adding that a contributing factor is the increasing number of permanent residents arriving who need temporary housing.
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By GlobalDataThere is debate, however, over how widespread this trend is. “In the rental market, we have seen some landlords converting units to short-term for the World Cup but not in large numbers,” says real estate agency Betterhomes group managing director Richard Waind. “Furnishing and licensing costs to set up your property for short-term rentals makes it uneconomical for most landlords.”
Qatar is the first Middle Eastern country to host the World Cup, having hosting rights for the tournament in 2010. That decision has been fraught with controversy, with former FIFA head Sepp Blatter saying the country was a bad choice. “It is too small of a country. Football and the World Cup are too big for it,” he lamented.
Dubai takes in the World Cup overflow
Dubai, now hosting the overflow, isn’t much bigger than Doha, but the emirate is used to taking in vast quantities of tourism, and contains many glitzy hotels and resorts. Knight Frank data shows that Dubai has more than 140,000 hotel keys, with 30,000 under construction. By comparison, Qatar has around 30,000 in total.
It will be a while before data shows the true impact, “but for now anecdotal evidence suggests that room rates and occupancy levels are soaring past pre-Covid levels in both Doha and Dubai”, says Faisal Durrani, partner and head of Middle East research at Knight Frank.
Other factors including the Russian invasion of Ukraine, which has sent Russians and Ukrainians alike flocking to Dubai, and the beginning of the emirates tourism season have also had an impact on short and long-term lets in Dubai’s market.
“These forces are inflows from wealthy individuals who seek new investments following the Russian invasion of Ukraine and for whom Dubai is a preferred location to buy properties,” says Ralph Wiegert, the head of S&P Global Market Intelligence Middle East and North Africa economic forecasting team.
“Recycling of petrodollars, with oil prices still remaining relatively high, is another factor supporting Dubai properties, as is the ongoing rebound effect following the Covid-induced recession. The recent appreciation of the US dollar (and the UAE’s dirham) is a mild dampener for Dubai property demand for potential buyers from non-dollar-related areas such as east Asia or Europe.”
Yet the World Cup is certainly impacting Dubai’s market, with demand for hotels in the UAE expected to rise by up to 40% in the run-up to the kick-off of the tournament, according to a report by online travel agency Musafir.com.
While landlords convert properties to short-term lets, a shortage of long-term lets remains. “If you look at what is available, especially in prime areas, particularly for long-term, we have such scarce stock at the moment,” says Taimur Khan, head of research at commercial real estate company CBRE. “It is unbelievable.” Over 2022, Dubai has worked to add 42,000 units to its stock.
What will happen after the World Cup?
With an influx of World Cup travellers, some of them high-net-worth individuals, opting to stay in Dubai and commute to Doha, Dubai’s developers are hoping some will be attracted to the city’s lifestyle and invest long-term.
There may be “a small group of individuals who would not have considered the region or Dubai as a place to live before the World Cup but have now discovered the benefits of living there”, says S&P’s Wiegert. If that is the case, then Dubai could be an unlikely winner of the World Cup.
