If the rent's too much - check into a hotel

With rental prices stubbornly high, many people have turned to hotel life to help solve their accommodation problems.

14/09/10 - Abu Dhabi, UAE -   Geffrey Alfonso and his family have been living full time at StayBridge Suites on Yas Island for more than one year.  With rent still sky-high and a shortage of quality apartments, many people opt for living in hotels and hotel apartments.   (Andrew Henderson / The National)

Taufic Dandachi is in no rush to find an apartment. Since moving to the UAE nearly four years ago, Mr Dandachi, 55, a contractor from Lebanon, has lived in two villas in Abu Dhabi. His first place, located in Khalifa City A, was a large villa costing a total of Dh550,000 a year, or Dh183,000 between him and two friends. With the rent exceeding his budget, Mr Dandachi eventually moved out and found a more reasonably priced villa in the Al Bateen area.

But several months ago, to his dismay, the landlord served him with a notice announcing that the property would be gutted for renovations. Mr Dandachi checked himself into the Holiday Inn on Airport Road in Abu Dhabi. Three months later, he still calls his room on the 8th floor home. "If you want to compare it to a one-bedroom apartment, I think the rent in Abu Dhabi would be about Dh120,000 per year," he says, eating cakes and sipping coffee in the hotel restaurant.

"Then you must add on such things as furnishings, utilities, parking and amenities. I think you come out ahead staying in a hotel." At the Holiday Inn, Mr Dandachi pays Dh350 a day to live there full time. That's about Dh10,645 a month, or Dh127,750 a year. He believes that living in a hotel makes financial sense. While the "rent" is more or less equivalent to market prices, the extras - free internet and cable TV, free daily housekeeping, free parking, utilities, pool and work-out facilities, and free furnishings - add up to thousands of dirhams every month in savings.

Also, as a single professional on the go, it represents a hassle-free and convenient lifestyle. But Mr Dandachi is not an isolated case. While in many countries the idea might seem extravagant, reserved for the rich and famous, high rent prices, a transient expatriate population and an exploding hospitality industry have caused more and more UAE residents to consider hotel living as a flexible and affordable housing option.

Demand is so hot that establishments are specifically targeting long-term guests. Fraser Suites, for example, a company with venues in expatriate hubs such as Hong Kong and Bangkok, launched in Dubai early last year to harness this market. David Brown, the general manager, says the brand had planned its emergence on the UAE scene for years. "It's largely due to the high proposition of expatriates here, many of which are here for one year or two," he says.

"We fulfil a straightforward requirement. People don't want to be locked in to the perils of renting or owning residential property." Mr Brown adds that full-time residents now make up nearly half of their business. The facility, just outside of Dubai Marina on Sheikh Zayed Road, offers furnished apartments with a dining room, living room and a fully furnished kitchen. Guests can also take advantage of the amenities, such as the gym, pool and squash courts, as well as housekeeping services, 24-hour security, free local phone calls, cable TV and wireless internet.

"At the end of the day, if you were to look at an empty residential apartment, you must look at everything from furnishing to the Dewa bill," Mr Brown says. "The residential market is do-it-yourself, and many people place a premium on the availability of services. If you work six days a week, you want to make the most of your time." Vincent Fernando is one professional who doesn't want to worry about anything but work.

As an adviser to the director general at the Abu Dhabi Educational Council, he values the ability to leave his hotel apartment in the morning and know it will be clean when he arrives home at night. Mr Fernando, 61, who is originally from the US, pays Dh150,000 a year to live in a one-bedroom apartment in Fraser Suites. He moved in last May and has no intention of leaving anytime soon. "I have owned homes in the past and didn't want the responsibility," says Mr Fernando, who pays the yearly fee in two six-month installments. "I didn't want to go through the issue of buying furniture and, when the contract ends, having to sell it or do something with it. I didn't want a landlord and I didn't want any complications."

Sid Sattanathan, the general manager of the Holiday Inn, says it all comes down to lifestyle and living in a hotel isn't for everyone. There are drawbacks to not renting a flat, such as a limited ability to entertain friends and a strict no pet policy. You can't select your own furnishings and neighbours may be a bit too close for comfort. In the case of the Holiday Inn, there are no kitchens in the rooms.

Guests must fend for themselves when it comes to meals, although they receive a 10 per cent discount in the hotel's restaurants. "There are those who really enjoy cooking," Mr Sattanthan says. "But to be honest, when we did our forecasting we didn't expect to have so many long-staying guests. It's one of our more important segments. With high rental prices and taking in all the other costs and factors, it's a hassle-free experience."

Mr Dandachi agrees that time and convenience were the main criteria when he decided where to live. "It's more important than the money," he says. "I don't have to make my bed. I don't have to make dinner. I don't have to do anything." The convenience of hotel life appeals to more than just single residents. Geoffrey Alphonso, a 35-year-old manager for a software company in Abu Dhabi, lives in a hotel apartment on Yas Island with his wife and two children. When they arrived in the capital in March from Canada, the family sought a quiet area near a school that had parking and amenities. But the more they looked, the more they realised how difficult it was to fulfil their criteria at a reasonable cost.

"I did a lot of research," says Mr Alphonso, who has a seven-year-old daughter and a six-year-old son. "In Al Raha Gardens, for example, to find a decent place close to schools at the time, I was looking at three-bedroom villas for Dh250,000 to Dh300,000. And then you have to furnish it." If he were to buy quality furniture for a family villa, he estimates that he would spend Dh60,000 to Dh80,000. As well, he would expect to pay Dh3,000 to Dh4,000 each month on operational costs, such as internet, cable TV, parking, a maid service and electricity bills.

It seemed logical for Mr Alphonso to skip Al Raha Gardens and head down the road to Staybridge Suites on Yas Island. There, he spends Dh317,000 on a two-bedroom apartment. With all the extras, he's confident that the family comes out on top in more ways than one. "It has a fully equipped kitchen, living room, a balcony and two bedrooms with televisions in both. It really is everything you need, from cutlery, soap, plates to place mats. You can move in and just live," he says. Amenities include an outdoor pool, fitness centre, squash and tennis courts. But in addition to the savings and perks, Mr Alphonso says that he also enjoys the social aspect of Staybridge Suites.

Each morning, before he heads to work and the children go to school, the family wakes up and has the complimentary breakfast with other long-stay residents in the main reception area. He says taking part in these activities helps to make the family feel less like they are living in a hotel and more like a community with neighbours. Another perk of hotel living is the rewards programme. By living at StayBridge Suites, which is part of the Intercontinental Hotels Group and linked with other hotels such as Crowne Plaza and Intercontinental, the Alphonso family racks up thousands of points.

As a result, they often stay at hotels for free when on holiday, adding up to even more savings. "Last July, we were on our way back from Toronto and then stopped in Denmark for a week, all on points," Mr Alphonso says. Fady Sawaya, the manager of Staybridge Suites, believes the demand for hotel living will increase. "During the last year and now this year a lot of new brands and hotels are out there," he says.

"The number of rooms has increased and rates are affected. Meanwhile, the number of people coming to this country is growing. You have to look at the property market. That is the most important thing we take into consideration." One-bedrooms at Staybridge Suites cost between Dh180,000 and Dh200,000 a year, while two bedrooms run from Dh300,000 to Dh350,000, depending on the size and the time of year you move in.

Contracts at both Staybridge Suites in Abu Dhabi and Fraser Suites in Dubai can last anywhere between a month to several years, and the price will vary based on the length of stay. At the Holiday Inn, long-stay residents are defined as those who remain for at least two weeks, which gives guests the immediate benefit of free breakfasts, internet and dry cleaning. Mr Dandachi plans to keep his room until at least the end of October, as he believes rental prices in the capital may start coming down as more units come online.

According to Mr Sattanathan, the hotel manager, the cost to stay at the hotel full time will also go up in the winter to about Dh400 per day. "If rates go up I will have to weigh my options again," Mr Dandachi says. "Don't worry," Mr Sattanathan replies. "We will be flexible with someone we have a relationship with. You will have the same rate as before." It's a far cry from being served an eviction notice. For Mr Dandachi, loyalty now has rewards.