Global holiday rental market growth seen
Last year saw an unexpected growth in demand for property in struggling holiday rental markets including Dubai, Portugal, Ireland and Greece, according to a new report.
A study of demand in the second half of 2010 by HomeAway.co.uk found that Dubai experienced a holiday rentals recover as the economy and infrastructure improved and Portugal, Ireland and Greece saw a surprising growth in supply and demand.
It also reveals that Germany was a top country for 2010 and a new favourite for ski properties while Egypt, Turkey and Malta are growing markets. And the Olympic effect is already emerging in London with demand growing ahead of the opening of the Games next year.
Dubai was badly hit by the global recession in 2009. The property market was severely under valued causing prices to plummet and sales to drop. But by the end of 2010 the effects of the financial crisis started to wear off with data from HomeAway.co.uk showing an increase of 5% in booking enquiries for the year following large decreases in 2008 and 2009.
Indeed, the emirate was among the top ten most enquired about cities in the second half of the year and owners listing on the site also reported huge increase in business.
According to a recent report from the European Travel Commission, Germany was one of the best performing markets in 2010 and this trend is mirrored in this report that says that the country’s economic stability is increasing its popularity with residential investors and buyers are now focussing on Germany’s stable rental potential.
Interest from travellers is also strong. The country climbed from the twelfth most popular in the second half of 2009 to the ninth most popular in 2010. And it is emerging as a new favourite among ski enthusiasts. The mountain resort town of Garmisch-Partenkirchen in Bavaria ranked sixth out of the top ten most popular ski destinations, coming in above Samoans, Tignes and Meribel in France, and Haute Nendaz in Switzerland.
In terms of growth in demand, a number of countries in the Caribbean and Central America experienced a high growth in booking enquiries in the second half of 2010, suggesting a strong interest in exotic locations and a recovery of long haul travel. Greece also experienced surprising growth despite the recession, as travellers looked for cheaper accommodation alternatives.
‘I think the recession helped us, funnily enough. Self-catering in a holiday rental is cheaper than a hotel, plus more people are becoming aware it is possible to holiday in this way. Our business has experienced healthy growth right through the recession,’ said Alex Calothis, owner of a holiday cottage in the Peloponnese.
On the supply side, in terms of property listings Egypt, Turkey and Malta continued to grow following sustained strong increases over the past two years. Portugal and Ireland, which were heavily hit by the financial crisis, also experienced steady growth in the second half of 2010, with 19% and 17% increases in listings respectively.
With the 2012 London Olympics set to attract millions of visitors to the capital, savvy travellers are starting to book well in advance. Enquiries started to pick up towards the end of 2010 and there was a huge year on year growth in enquiries for the Olympics dates as at the end of January 2011 compared to January 2010.
‘The switch from hotels to holiday rentals has been steadily increasing, with particularly high spikes in demand around major sporting events. For the 2010 World Cup in South Africa, many visitors sought out holiday rental properties as an alternative to a hotel, which meant the average weekly income generated per property soared by almost 150%,’ said Tim Boughton, UK general manager at HomeAway.co.uk.
‘However, even at this increased rate, holiday rentals still often work out far cheaper than similar standard hotels, making them a highly attractive option for tourists,’ he added.