Tourism boom and changing preferences increase demand for short-term rentals in Dubai by 30 percent

With the tourism boom and demand for flexible living options, short-term rentals in Dubai are transforming the rental market, with demand increasing by 30 percent compared to the same period last year. Industry experts claim that this trend is revolutionizing the region’s real estate scene, offering property owners remarkable returns and visitors attractive accommodation options.

“This has enabled investors to achieve returns of up to 20 percent higher than with traditional leases. In comparison, long-term leases offer stable income and generate an average annual return of 7 percent,” explained Myles Rothwell, managing director of Edwards and Towers, a leading real estate brokerage and surveying firm in Dubai.

Popular areas for short-term rentals

In addition to the increasing demand, there are also certain areas in Dubai that are becoming increasingly popular for their short-term rental options. Anthony Joseph Abou Jaoude, Founder and CEO of Primestay, revealed that areas such as Business Bay, Arjan, Jumeirah Village Circle, Downtown Dubai, Palm Jumeirah and DAMAC Hills are particularly popular. These areas offer world-class amenities and trendy residential areas that offer unique experiences and effortless access to the city’s attractions.

“For example, most short-term renters with families prefer lifestyle-oriented residential complexes 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,” explained Cherif Sleiman, Chief Revenue Officer at Property Finder.

Changing tourist preferences

In recent years, Dubai has become a luxury destination with visitors willing to pay more for premium accommodation. One trend Abou Jaoude notices is the changing preference of families and groups visiting Dubai: they now prefer a larger home over multiple hotel rooms, driving up demand for holiday villas and spacious apartments for short-term rentals.

“In early 2023-2024, Dubai’s increasing demand for short-term rental properties offers landlords lucrative opportunities for high occupancy rates and attractive rental yields,” added Abou Jaoude. He added that Dubai’s tourism scene ensures strong demand for short-term rental properties and provides landlords and investors with a steady and profitable source of income.

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Outlook for the short-term rental market

The short-term rental market in Dubai is growing rapidly. However, the market remains fragmented, with the top five companies accounting for less than 10 percent of the supply.

Nina Klishevich, general manager of Blueground, expects a wave of consolidation in the next one to two years, with some operators 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 advancements such as AI-driven tools and smart home features will improve both the guest experience and operational efficiency,” Klishevich added. As remote work becomes more widespread, Klishevich predicts growing demand from digital nomads seeking flexible, short-term accommodation in Dubai.

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