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Demand for affordable luxury in Dubai

Let’s face it, Dubai is synonymous with luxury and it has long been the ultimate playground for the elite. But as the city becomes more accessible and travellers’ tastes and preferences expand, Dubai is transforming into a dynamic cosmopolitan city that offers something for everyone.

Fairmont Dubai luxury hotel. Image courtesy of Visit Dubai

Gone are the days of just gold-plated everything (although, let’s be honest, that’s still pretty cool!). Today, visitors are seeking more authentic, immersive experiences that showcase the real Dubai, and the city is delivering. According to Anna Skigin, CEO and Founder of Frank Porter, this trend aligns with global traveller preferences, which are increasingly seeking more authentic cultural experiences.

While Dubai’s luxury appeal remains strong, the mid-market segment is fast gaining traction and reshaping the emirate’s hospitality landscape. Frank Porter’s portfolio, which is made up of 80% mid-market properties and 20% in the luxury segment, reflects this trend. The short-let management company’s mid-market properties are largely located in areas like Jumeirah Village Circle and Dubai South, which enjoy high demand and provide strong returns on investment.

Skigin observes that while Dubai’s luxury travel market continues to flourish during peak seasons, drawing high-net-worth individuals willing to pay top dollar for exclusive experiences, consistent year-round demand in the mid-market segment is driven by families, business travellers, and international visitors prioritising affordable luxury.

As Dubai continues to attract business travellers and digital nomads, Skigin believes mid-market properties are well-positioned to cater to their needs. As it is, some neighborhoods are already projected to see steady demand, with rental prices expected to rise by up to 18% in 2025. In contrast, the luxury segment is expected to see more modest price increases of 8-10% in 2025.

Ultimately, there’s no doubt that Dubai’s hospitality landscape is evolving to cater to a more diverse audience. While luxury accommodation options will always be in high demand, there is no denying that the mid-market category offering high-quality amenities, flexible workspaces, and affordable rates is rapidly growing. As Dubai broadens its appeal to a wider audience, the demand for this class of accommodation is expected to soar.

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