It’s no longer Airbnb solely competing against traditional hotels in the GCC. Other players are vying for some action as the rebound in hospitality continues. Hotels are holding steadfast against the competition with strong growth of their own, especially in the UAE, emboldened by Expo 2020.
After experimenting with holiday homes for vacation and business trips, Stella Stays noticed that consistency was always an issue with temp stay management experience, design, and cleanliness.
UAE-owned hospitality brand Stella Stays has expanded its operations to Bahrain in a bid to rival Airbnb and disrupt traditional hotel models in the Middle East.
The hospitality start-up was launched in late 2019 and, as of August, boasts 300 properties across the UAE, Bahrain, and Canada using a range of managed properties for short, medium, and long stays.
Bahrain’s real estate market is witnessing growth in residential construction with developers progressing a robust number of freehold properties, mostly apartments.
The firm said its expansion plans seek to take advantage of Bahrain’s booming real estate sector, with $12 billion worth of real estate projects in the pipeline.
The kingdom’s 100% foreign ownership regulation also makes Bahrain an attractive place to set up.
Stella Stays’ units are designed by an in-house interior design team and feature stylish modern furniture, pre-loaded Netflix accounts, PlayStations, espresso machines, and 100+ on-demand services in addition to standard hotel like facilities.
The company has already secured one round of initial funding. Now the business aims to achieve a comparable level of success to a similar firm in the US.
Sonder also fights for market share
Another operator expanding its presence in the Middle East is Sonder, which announced earlier this year that it would be going public at a value of $2.2 billion.
Sonder is adding two additional buildings to its portfolio in Dubai. Through an agreement with Al Fattan Properties LLC, the company will manage and operate two of the three Al Fattan Towers in Downtown, with views on Burj Khalifa, to be operated as Sonder Downtown Towers.
Comprising spacious two- and three-bedroom apartments, ranging between 1,900 and 2,400 square feet, these towers add over 300 units to Sonder’s existing portfolio of operations in Dubai. The company currently manages and operates JBR Suites, a 164-unit property in Jumeirah Beach Residence (JBR) which has been open to guests for over a year. Sonder is also exploring additional expansion into the Palm Jumeirah, Dubai Marina, La Mer, City Walk, and DIFC areas of Dubai.
Headquartered in San Francisco, Sonder is present in 35+ cities in nine countries, with approximately 15,000 live and contracted units worldwide.
All Sonder spaces in Dubai are equipped with a full in-unit kitchen and balcony, as well as access to a fully-equipped gym, large pool and laundry services.
UAE’s hospitality sector
According to the latest forecast from hospitality industry data provider STR, Dubai hotel occupancy is set to rise by 77% year-on-year (yoy), with revenue per available room rising by an even stronger 86%.
This new optimism is reflected in a measurement called the Purchasing Managers’ Index (PMI) which as early as Q1 2021, the average UAE PMI index was up 7.5% yoy with a score of more than 50 in March, i.e signifying market conditions are expanding.
The score for July was 54, the best since January 2019.