Why I say No to some holiday homes in Dubai

A holiday home in Dubai only works when its unit economics work: what the operator earns has to cover the fixed tech cost, labour and staff, with something left over. At One Perfect Stay I learned the hard way that saying No to the wrong home matters more than saying Yes.

What is the hardest lesson in holiday home management?

As a veteran of Dubai’s ever-evolving holiday home industry, I have learned some hard lessons over the last 12 years.

The hardest was learning when to say No. Yes always came easy to me.

One Perfect Stay is self-funded. We bootstrapped from zero to almost 200 homes. When I look back, what would I do differently today?

Why do unit economics decide whether a holiday home works?

First and foremost, be very careful about what you onboard. The unit economics have to sit well, or the home will eat you alive.

Tell homeowners about the fixed tech cost that keeps a unit alive and kicking on multiple platforms. For us it is $120 per unit. I am sure many of those 200 homes were sucking money out rather than bringing it in. Know your portfolio. Understand what’s selling and what’s not.

Take a studio in Dubai South that rents for AED 4,000 a month on a typical 15% management fee. Does that work for the effort you put in?

You earn AED 600. Your fixed tech cost is AED 440. That leaves AED 160 for labour, staff and everything else. How do the unit economics work?

How should a holiday home portfolio be balanced?

Take a good look at your portfolio mix. We all know studios and one-bedrooms work best, and they should make up at least half the portfolio. If you have more three-bedrooms than two- and one-bedrooms, something’s off.

I’m not talking about villas. They are always in demand, and a pool is the cherry on top.

Concentration by area matters too. If you already have ten three-bedrooms in Dubai Marina, an eleventh will struggle, at least if you want to keep the portfolio healthy and the landlords informed.

Why do holiday home operators inflate their unit counts?

And what is it with operators inflating their unit counts three times over?

I met someone claiming 500 homes, so I checked their listings online. The real number was closer to 250 bookable homes. Another claimed 700; the real number was well under 300.

It brings unwanted mistiness into the business. Keep the count clean and you’ll have a better strategy for management and monetisation.

Saying No comes first

It’s not as if I haven’t made these mistakes myself. Of course I have. So I say it to myself and to anyone listening: saying No matters more than saying Yes.

Next time: when everything sits well except the homeowner.

FAQ

How do you know if a holiday home in Dubai is worth managing?
Run the unit economics before you sign. Take the monthly rent, apply the management fee, then subtract the fixed tech cost per unit, labour and staff. If little or nothing is left, the home costs the operator money however busy it is.

Which holiday homes perform best in Dubai?
Studios and one-bedroom apartments work best and should make up at least half of a healthy portfolio. Villas, especially with a pool, are always in demand. Too many three-bedroom apartments, or too many similar homes in one area, is a warning sign.

Why do holiday home operators inflate their unit counts?
A bigger number looks impressive to landlords and partners. But checking listings online often shows far fewer bookable homes than claimed. One Perfect Stay keeps its count clean, because an honest count leads to better management and monetisation decisions.

Mahwussh Alam is the founder and CEO of One Perfect Stay, a DET-licensed holiday home operator in Dubai. oneperfectstay.com