Skift Take
As more wealthy travelers are looking to relocate to Dubai, hotel companies have spotted a massive opportunity by leasing out their luxurious brands to developers.
Dubai is one of Marriott’s largest markets for branded residences outside the U.S. – an upmarket segment of real estate that has boomed over the past decade. Today, Marriott has nine branded residences in Dubai, as well as two more in Ras Al Khaimah and a string of ultra-expensive Bulgari properties.
Marriott’s chief operating officer for the Middle East, Sandeep Walia, told Skift the surge in interest can be partly attributed to tourists opting to relocate to Dubai.
“There has been an increase of people moving to the UAE,” he said. “More and more people want to move here and that’s creating an increase in people buying residences and branded residences.”
Walia added: “A lot of guests now want to live in the environment of our brands. That’s an experience they can now live in, rather than only have on vacation.”
For Marriott, the money comes from developers paying to use the brand. For developers, branded residences help to lessen the risk of a project. If a developer is building a hotel, for example, they can likely pay for a large proportion of the building costs by selling off branded residences attached to the hotel.
In Dubai, branded residences are going for enormous sums.
A Bulgari-branded villa for example is for sale for $22 million on Sotheby’s International Realty (Marriott runs Bulgari Hotels). For slightly less, a Ritz-Carlton-stamped penthouse is going for $17 million.
A Savills report indicates that the branded residential market has experienced a surge of 230% in the past decade, with over 50,000 additional units introduced.
“We continue to see a lot of branded residents coming into the market,” said Walia. “Certainly, UAE is taking the lead, but we’re starting to see this kind of go into other markets as well.”
In the wider region, Marriott announced Ritz-Carlton homes within Saudi Arabia’s Diriyah Gate, and St. Regis residences in Oman.
Residential projects from other brands in Dubai include a standalone tower of Ritz-Carlton residences, W Hotels-branded residences on Palm Jumeirah and villas along the creek, also under Ritz-Carlton branding.
Here are some examples currently listed as for sale:
More economical hotel brands have also got in on the trend, such as Rove Hotels.
All Part of The Plan
In 2023, Dubai Tourism announced its new plan to convert tourists into residents.
Speaking at DET’s latest City Briefing, held at Dubai World Trade Centre in June, Dubai Tourism CEO Issam Kazim said, “Today we have two new KPIs. We want to make sure Dubai continues to be one of the best cities to work in, and more importantly, one of the best cities in the world to live in.”
Around a quarter of all Dubai tourists return within a year. Kazim said convincing those people to make Dubai a permanent home is key.
“Once you bring them in, you’d hope they spend more money next time and stay for longer. Eventually, they would consider living in Dubai, and we have all the visas to facilitate that. We’d like them to work here, live here and retire here. It’s all about closing the loop,” Kazim said.
A prime example of this has been the Russian market. Russian tourism into Dubai soared in 2022 and 2023, later slowing down as the richest of them decided to move to Dubai permanently.
According to Henley & Partners, a company specializing in global residence and citizenship planning, Dubai currently hosts 210 individuals classified as centi-millionaires, with net worths surpassing $100 million, along with 15 billionaires. Projections indicate that the city is poised to solidify its standing further. In its 2023 Centi-Millionaire Report, the firm forecasts a 78% increase in Dubai’s centi-millionaire population over the next decade, marking the fastest growth rate globally.
Towards the end of last year, one of Dubai’s richest men warned this new rush for luxury real estate will likely cause the city problems. A large proportion of Dubai’s most expensive listings right now are hotel-branded projects.
