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Tourism surge, evolving preferences raise demand for short-term rentals in Dubai by 30 percent

Business Bay, Arjan, Jumeirah Village Circle, Downtown Dubai, Palm Jumeirah and DAMAC Hills are particularly popular for short-term stays
Tourism surge, evolving preferences raise demand for short-term rentals in Dubai by 30 percent
In recent years, Dubai has become a luxury travel destination with visitors willing to pay more for high-end accommodations

Amid the surge in tourism and demand for flexible living options, short-term rentals in Dubai are reshaping the rental market with a 30 percent increase in demand compared to this time last year. Industry experts claim that the trend is revolutionizing the region’s real estate scene, offering remarkable returns for property owners and attractive accommodation options to visitors.

“This has led to investor returns up to 20 percent higher than traditional leases. In comparison, long-term rentals offer steady income, maintaining an average annual yield of 7 percent,” stated Myles Rothwell, managing director at Edwards and Towers, a leading real estate brokerage and surveying practice in Dubai.

Popular short-term rental areas

Beyond the increase in demand, there are specific areas across Dubai that are becoming more well-known for the short-term rental options they offer. Anthony Joseph Abou Jaoude, Founder and CEO of Primestay, revealed that areas like Business Bay, Arjan, Jumeirah Village Circle, Downtown Dubai, Palm Jumeirah and DAMAC Hills are particularly popular. These areas offer world-class amenities and trendy communities, providing unique experiences and effortless access to the city’s attractions.

“Most short-term renters with families, for example, prefer lifestyle-oriented communities with vibrant assets and good connectivity. While consumers seek unique experiences curated by diverse hosts, for investors this is an opportunity to select properties that promise the best returns,” stated Cherif Sleiman, chief revenue officer at Property Finder.

Shifting tourist preferences

In recent years, Dubai has become a luxury travel destination with visitors willing to pay more for high-end accommodations. One trend that Abou Jaoude notes is the shifting preference among families and groups visiting Dubai, who now prefer a larger home over multiple hotel rooms, driving up the demand for vacation villas and spacious apartments for short-term rentals.

“In early 2023 up to date 2024, Dubai’s rising demand for short-term rentals presents landlords with 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 rentals, offering landlords and investors a steady and profitable income stream.

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Short-term rental market’s outlook

Dubai’s short-term rental market is experiencing rapid growth. However, the market remains fragmented with the the top five companies making up less than 10 percent of the offerings.

Nina Klishevich, general manager of Blueground, expects a wave of consolidation over the next 1-2 years with some operators scaling up to manage 100+ units, while others may exit the market.

“We can also expect tighter government regulations to ensure compliance with licensing and guidelines. Additionally, technological advancements like AI-driven tools and smart home features will enhance both guest experiences and operational efficiency,” Klishevich added. As remote work becomes more prevalent, Klishevich foresees a growing demand from digital nomads seeking flexible, short-term accommodations in Dubai.

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