A view of Dubai Marina, one of the city’s hotspots for short-term rentals. — Archive photo
Short-term rentals are changing the rental market in Dubai: As the data shows, demand has increased by 30 percent compared to the same period last year.
According to industry experts, this trend is revolutionizing the real estate scene in the region, offering savvy property owners high returns and visitors attractive accommodation options.
“Over the past year, we have seen a boom in short-term rentals in Dubai. Bookings have increased by 30 percent due to increased tourism and demand for flexible living options,” explains Myles Rothwell, managing director of Edwards and Towers, a leading real estate brokerage and surveying firm in Dubai. “This has resulted in returns for investors that are up to 20 percent higher than traditional rental contracts. In comparison, long-term rentals offer a stable income and maintain an average annual return of 7 percent.”
“When looking for an ideal short-term rental, thorough research is key,” says Cherif Sleiman, Chief Revenue Officer at Property Finder, a major regional real estate portal. “Our recent white paper, Opening Doors: Insights, Trends and Forecasts for Real Estate in the UAE, shows that most short-term renters with families, for example, prefer lifestyle-oriented communities with vibrant amenities and good connectivity. While consumers are looking for unique experiences curated by diverse hosts, this is an opportunity for investors to select properties that promise the best returns. In fact, the growth of short-term rentals is an exciting development in the real estate sector and we look forward to its continued success,” he adds.
In addition to the increasing demand, there are certain areas that are becoming increasingly popular for their short-term rental options. Anthony Joseph Abou Jaoude, founder and CEO of Primestay, one of the leading vacation rental companies in Dubai, highlights that areas such as Business Bay, Arjan, Jumeirah Village Circle, Downtown Dubai, Palm Jumeirah and Damac Hills are particularly popular. These vibrant areas offer a rich mix of world-class amenities and trendy residential areas, allowing for unique experiences and effortless access to the city’s attractions.
“Over the past few years, Dubai has emerged as a luxury destination with visitors willing to pay more for premium accommodation. A clear trend is that families and groups are choosing larger holiday homes over multiple hotel rooms, driving up demand for holiday villas and spacious apartments for short-term rental. In early 2023-2024, Dubai’s rising demand for short-term rentals offers landlords lucrative opportunities for high occupancy rates and attractive rental yields. Dubai’s vibrant tourism scene is driving strong demand for short-term rentals and providing landlords and investors with a steady and profitable source of income,” adds Anthony.
With winter approaching, the city is preparing for an influx of visitors with different tastes and preferences. Keeping these needs in mind is crucial for investors looking to maximize the value of a property in this segment.
“The short-term rental market in Dubai is growing rapidly, with new players entering the scene. However, the market remains fragmented, with the top five companies accounting for less than 10 percent of supply. Over the next one to two years, I expect to see a wave of consolidation, with some players expanding their capacity to over 100 units, while others may exit the market. We can also expect stricter government regulations to ensure compliance with licenses and policies. In addition, technological advances such as AI-driven tools and smart home features will improve both the guest experience and operational efficiency. Finally, as remote work becomes more prevalent, we expect to see growing demand from digital nomads seeking flexible, short-term accommodation,” says Nina Klishevich, General Manager at Blueground, which operates the world’s largest curated network of furnished rental properties.
To have high return potential, short-term rental offerings must meet both regulatory and consumer requirements. Key points that investors should consider when targeting this segment include:
Regulatory clarity and compliance: Ensure you have clarity on all relevant regulatory processes, with a focus on health and safety, quality protocols and consumer protection measures.
Technology Integration: Find new ways to make your living space extremely comfortable and connected for your potential renter by leveraging smart home devices that enhance the guest experience and help hosts streamline their operations.
Sustainability initiatives: Promoting environmentally friendly practices in the short-term rental industry, such as the use of energy-efficient appliances and sustainable building materials, is consistent with broader environmental goals and attracts environmentally conscious travelers.
Trusted platforms: Use trusted property search platforms to showcase your short-term rental to a global audience.
