Shaimaa Ibrahim
The short-term rental market in Saudi Arabia has witnessed rapid development throughout the past few years. Silkhaus is a cutting-edge prop-tech startup that aims to revolutionize and develop the short-term rental scene in the kingdom and the Middle East. It provides an integrated set of services that meet the needs of guests and landlords.
Silkhaus plans to expand its business in the Saudi market in the coming period. Therefore, Sharikat Mubasher had an interview with Sabine El Najjar, VP Commercial & General Manager of Silkhaus Saudi Arabia, to discuss future plans, and share with us her expectations for the future of the short-term rental market in Saudi Arabia, and its leading investment opportunities.
What services does Silkhaus provide to real estate owners to manage their properties, and what distinguishes it from traditional rental methods?
Silkhaus is a cutting-edge proptech startup dedicated to revolutionising short-term rentals across the Middle East. Founded in 2021, Silkhaus equips property owners to monetise their assets as short-term rentals with the opportunity to earn 20-40% more than regular long-term rentals.
With Silkhaus, once landlords partner with us, we take care of every element, including furnishing, marketing the apartments, securing customers and even maintaining the units. Landlords have access to our advanced landlord portal that gives them full and real time visibility of bookings and earnings. Since our model is extremely flexible, landlords can also choose to book their apartment for their own use and can sell their units vacant on transfer with a minimal notice period, unlike with long term leases.
Today we partner with individual property owners as well institutional investors who own dozens of residential units. All together, our managed asset base exceeds $120 million in value, and we operate in three cities across two markets.
Last January, Silkhaus closed a Pre-Series A round, can you provide us with more
details of this round? How could this investment boost your expansion plans?
The pre-series A round is testament to the fundamentals of our business and the backing we have received from Partners for Growth. With our business growing by more than double in 2023, we chose to not dilute equity, but opted for debt financing instead. This allows us to stay well capitalised while remaining extremely focused on how we want to grow our business.
In terms of our plans, the round is to fuel our entry into Saudi Arabia. This means we need to invest extensively in developing our technology for the local market, hire the right talent and build a large network of landlords.
What are Silkhaus’s future expansion plans in the Saudi market?
Saudi Arabia is currently our first expansion outside the UAE. We have spent the last 6 months on regulatory set-up, talent onboarding and landlord discussions. We’ve had a successful lead generation campaign that has attracted interested landlords and investors alike. In fact, we see a large demand for short-term options as the Kingdom faces a shortage of hotels and high-quality accommodation. While KSA is attracting significant investment in the real estate and hospitality sector, it will be some time until that supply becomes available. That is why we are working with landlords to upgrade their properties to give guests a world-class experience. From our soft run, we’ve seen the appetite for Silkhaus properties grow. Right now, we remain focused on on-boarding more landlords and ensuring that we are contributing to the vision of the Kingdom for the hospitality and tourism sector.
How do you see the future of the short-term rental market in Saudi Arabia, and what
about the investment opportunities in this market?
Globally, the short-term rentals market is worth over $100 billion and in the Middle East, the sector is still in the early stages of growth. For Saudi Arabia, this means there’s a significant opportunity in developing this industry, as well as creating jobs for local talent.
In 2023, Saudi Arabia saw$74 billion worth of real estate deals completed. A lot of these will be deployed towards managing the shortages faced by visitors. As Saudi Arabia attracts global tourists for business and leisure, and with a number of major events scheduled, including the FIFA World Cup in 2030, we anticipate a major demand for short-term rentals. This will be a key driver in attracting investments into the real estate sector, while also generating strong returns for property owners. From our day-to-day conversations with industry veterans, we’ve also seen an interest from large developers that were historically more traditional to enter this space
In your opinion, how will digital technologies support the short-term rental market in the Gulf region, and Saudi Arabia in particular?
Technology is at the core of what we do, whether you’re a guest or a landlord. For guests, technology is embedded in every part of their journey, from discovery and booking, to check-in using digital locks all the way to our digital concierge service and our in stay strategic partners that are embedded into our offering for a seamless customer experience.
For landlords, Silkhaus leverages technology to provide end-to-end property management solutions for short-term rentals, managing every aspect from bookings to distribution and from operations to the guest experience. With this, landlords do not need to get involved in the day-to-day operations of their properties, but still have complete visibility of its management.
Our technology powers short-term rentals and has attracted real estate owners ranging from institutional entities with mass holdings to individual retail owners with single apartments.