The rise in workation: Implications for the hospitality and real estate sectors

Just like in the rest of the world, people in the UAE are mixing pleasure with business more frequently than ever before, especially with the pandemic eroding the traditional corporate culture. The self-employed, as well as the employees who are working from home, are more inclined towards flexibility in their work routines. Following the post-pandemic reopening, many are swapping their kitchen-table workstations with 5-star luxury vacations — or “workations” as they are popularly called — or renting properties for long-term stays in order to maximize their productivity. 

Dissolving boundaries

Dubai is particularly capitalizing on the “workation” trend. Many properties and local hotels are increasingly targeting the new wave of digital nomads who simply want to change their work-from-home situation into an exotic experience. The boundaries between business and leisure continue to become blurry, and Dubai has been quick to grab the opportunity, with the Department of Economy and Tourism(1) initiating the digital nomad visa programme, so remote workers from across the world, including employees and business owners, can come to the sunny city and stay for up to one year. 

The requirements of the programme are quite relaxed and just about anyone can apply. The only prerequisites are a passport valid for at least 6 months, proof of monthly income worth USD 5,000 minimum, and relevant bank statements. 

The growth of ‘bleisure’ — leisure plus business 

Many hotels across the Middle East have taken the cue and are rapidly redesigning their common areas to function like co-working spaces, intended to attract and retain remote working customers. Leading hotels are offering long-term stay packages that snag a great deal. It is natural to expect that the real estate sector within the UAE will also ride this wave, with many expats and tourists on remote work visas expected to rent homes within the country to enjoy the warm weather, super high internet speeds, and access to high-quality medical services — the three elements considered to be the most important aspects for remote working. 

Over the last year or so, UAE has witnessed(2) an influx of mid-to-senior level executives as well as high-net-worth individuals. In fact, according to research(3), Dubai is considered to be a top beach destination for digital nomads in 2021. Additionally, the new visa scheme allows individuals to have full control over their residency status and not be bound by the traditional, restrictive ‘sponsorship’ deals offered by companies.

The UAE’s intrinsic appeal

While the UAE may be riding the workation trend, other significant elements that have bolstered the country’s real estate sector and pushed towards recovery, especially after the pandemic, include a slew of government reforms over the past few months, attractive mortgage rates, and a shift in demand patterns. But it’s important to understand that recovery is not going to end anytime soon. The real estate sector, despite facing a slowdown, has revived and is showing a positive upward trajectory. Strong and growing demand, peaking supply growth, and longer lead times for new projects are expected to create a tighter-than-expected market over the next few years. 

The traditional office culture is giving way to something new. Some even say that by 2035, permanent workers will be rare. The hospitality sector has seized the opportunity and is offering a better alternative, allowing workers to comfortably mix work and leisure.


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