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In April 2022, the launch of the UAE’s remote working visa scheme -an arrangement that allows for people to live in the UAE while working for employers outside the country- opened the nation’s doors to remote workers from across the globe. The potential influx of such digital nomads -described by Statista as a faction of the global population that “generally combine remote work and travel for various reasons and lengths of time”- thus presents quite a unique challenge to the UAE’s real estate and hospitality markets.
“A lot of professionals, especially millennials and Gen Zs, these days are on freelance visas; they’re digital nomads who want to come to Dubai to check it out for a few months,” says Mohannad Zikra, co-founder and CEO of Dubai-based proptech company Stella Stays. “But what options do they have [for their stay]? Hotels are often very costly and inconvenient, but they can’t sign a one year lease for an apartment either. What we thus realized is that this next generation needs flexibility- the ability to pay by credit card, pay monthly, and be in a place that gives them the value, the experiences, and the community that they want.”
And this is exactly what Zikra’s enterprise, Stella Stays, offers. Launched in 2019, the company offers furnished residences and suites on a subscription-basis for as short a duration as one night to longer periods of more than a year. The vision that Stella Stays aims to achieve is to help people simply “show up and live,” and apart from the UAE, its furnished residences can also be found in Saudi Arabia, Bahrain, Turkey, and Canada.
According to Zikra, Stella Stays’ main strength lies in its promise to offer a seamless and quick selection process using the company’s own digital platform- an aspect, he believes, is beneficial to both the property developers as well as the tenants. “What we do is we take a full residential building, and instead of having the real estate developer put it on the market and deal with many different tenants, we convert it into our own designed, furnished rentals- ones that are enabled with technology and amenities,” Zikra adds. “We have our own in-house technology team that looks into everything from the way we manage the operations and introduce automations, to giving guests an app that simplifies and digitizes the whole experience.”
Plus, in a step to further ease the process of moving into an accommodation in the UAE, home-seekers aren’t required to use a local bank’s check or pay a real estate agency fee at any Stella Stays unit, regardless of the duration of a tenant’s stay. There is also no need to present an Emirates ID -an official ID from any country will suffice- and the hassles of activating one’s accounts with Dubai Electricity and Water Authority and/or telco provider du are also taken care of by the startup. These are just a few of the factors that make the Stella Stays offering stand out, and that the name that Zikra chose for his company only serves to assist in this regard. “What we wanted to do is build a brand name the same way that customers talk about a Marriott or a Four Seasons,” Zikra explains. “‘Stella’ means ‘star’ in Italian, and it held a lot of significance for us because, the way we see it, our customers have so many ‘stars’ to always find and come back to. So, they can say, ‘Oh, today I’m staying at a Stella in Jumeirah Lakes Towers; tomorrow, I’ll stay at the Stella in Marina.’ It’s a very catchy name, and so I think we did a good job!”
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It is vital to point out here, of course, that what shaped the fabric of these services by Stella Stays is the very occurence to that led to the migration of digital nomads and the shift to working from home: the COVID-19 pandemic. “When the COVID-19 crisis happened, there was so much demand for flexibility, because, owing to financial instability, not everyone was sure about whether they should renew their rental contracts or not,” Zikra explains. “And so there was a 50% increase in furnished rental bookings at Stella Stays during this period. People didn’t know how long this pandemic was going to last, and so they needed something that’s more flexible.”
And it was precisely during that period that the Stella Stays team saw the potential in how their model could be used by a plethora of people, and not just digital nomads and travelers. “Initially, when we started, our focus was really around hospitality and tourism, but when the COVID-19 crisis hit us, we realized our furnished apartments actually serve diverse use cases,” Zikra explains. “It can work very well for a traveler, but it also works very well for a resident. Because if you really think about it, an apartment is a necessity for pretty much every person in the whole world. It just depends on what persona you apply: is it someone that’s traveling for work that needs a place for three months, or is it a family that’s in between moving houses within a city and needs somewhere to stay? And so, we really focused a lot of our technologies and strategies in understanding how we actually build a product that works for residents to adopt the ‘show up and live’ concept as well.”
Here, Zikra states that the model adopted by Stella Stays -from offering a flexible way of living, to easing the process of finding the right home- is an important step towards breaking some of the rigidity that has often characterized the real estate industry. “Globally, technology has come in as an enabler of change- Netflix changed the way people watched content, Amazon changed the shopping experience, Uber changed the transportation business; but when it came to accommodations, it is still one of the most traditional businesses that has not changed whatsoever,” Zikra explains. “Whether you want to purchase or rent, the processes within the real estate space are still very traditional; they have not been digitized or innovated. That is the big loophole we’re really addressing, by allowing people to find the right place at a reasonable price that they could move into, and start living in within a few clicks, without all the headaches that come with it. It was very transparent and very personalized as well- if our tenants have specific requests, they can make that. So, we’re really creating the future of living overall- whether you’re living for a week or two, or a month, or a year, this has become an essential part of what we’re doing.”
Zikra reveals here that the accommodations provided by his company in Riyadh are witnessing 100% occupancy rates- a statistic that is especially significant given that Stella Stays moved into the Saudi Arabia market not too long ago, in June 2022. “If you also take a look at our global occupancies today, we’re at over 80%, and the reason why we have that is because one of the first things that we’ve done is we’ve built a technology platform,” Zikra adds. “We’ve actually built something called a dynamic pricing engine that makes sure that not only do we market our products across channels like PropertyFinder, Airbnb, Booking.com, and Expedia, but also in our own system. So along with diversifying our primary offerings to serve many different use cases, we also have the technology that makes sure that we’re always competitively priced.”
But for a company that prides itself on its digital prowess, Zikra believes there is good reason to believe that such results stem from the human element of Stella Stays model. “Part of what we have to do in the vision of Stella Stays is thinking about how we can foster communities and make people feel at home,” he says. “And that’s why we have our own interior design teams. At our recently launched building in Riyadh, we’ve engineered amenities, such as co-working spaces, rooftop, lounges, and different types of areas that allow people to get together and communicate. Yes, the process of booking is tech-enabled, and that’s really what helped us get to 100% occupancy there. But it is three things together -the technology, the building and the stay, and the community that really put together the offering that we’re providing!”
So, what’s next for Zikra and Stella Stays? “We’re on a mission to grow really quickly globally, but part of our strategy is to really dominate the MENA region for now,” Zikra declares. “As a company, we want to become the biggest landlord globally. And so our focus right now is to build a model that works, that’s proven, that’s multi-city, that’s tech enabled, and make sure that we can build branded residences across all neighborhoods.” Here’s hoping!
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