Dubai’s Airbnb market has witnessed a significant surge in listings over the past three years, doubling in number as the global trend gains momentum in the emirate. Operators of varying scales are active in Dubai, from major players managing hundreds of properties to newcomers. Like many Airbnb companies, these firms utilize social media as a marketing tool, aiming to expand their portfolio to reach a scale comparable to a medium-sized hotel.
The holiday homes market in Dubai is projected to sustain growth in the coming years, even amid the challenges posed by the COVID-19 pandemic. Factors such as the Expo and evolving regulations contribute to this trajectory. Large-scale operators typically employ subleasing or revenue-sharing models, primarily utilizing Airbnb as the primary letting channel.
Regulations and Licensing
Regulations are stringent, requiring operators to register their companies and obtain licenses. Each property must have permission from the owner and comply with building regulations. Currently, there are nearly 25,000 active Airbnb listings in Dubai, concentrated in prime tourist areas such as Dubai Marina and Downtown Dubai although pockets of affordable locations are opening up in places such as JVC, JVT and IMPZ.
Operating Airbnb properties can be lucrative, with average monthly profits per unit around $1,000. Dubai was ranked as the most profitable and expensive location for Airbnb landlords in 2022. Social media plays a crucial role in marketing and and providing trust and transparency for operators, who often share revenue and cost figures with their audience.
Revenue management is essential for sustained success, particularly during seasonal fluctuations. Many AirBNB operators adjust prices dynamically using automation software that finds the correct average daily rate and pegs it for that particular day. While subleasing does yield higher profits, it requires substantial upfront investment, including rent, furnishing, and commissions. Also landlords must keep in mind with more people passing through their property, wear and tear is bound to increase leading to more on-going maintenance on their properties.
Despite the attractiveness of Airbnb subleasing, it’s not without risks, particularly during economic downturns. However, the model offers a relatively accessible entry point compared to traditional property investment. As Dubai’s Airbnb market continues to evolve, operators navigate challenges while capitalizing on opportunities for growth and profitability.
To List Your Property For Short-Term Rental, Follow These Steps:
- Obtain a holiday home permit, certifying that your property meets technical specifications and legal requirements. This can be done by going to the Dubai Tourism website and simply applying.
- Submit an application to the Department of Economic Development (DET – formerly DTCM) for processing and approval.
- Register for an account on the DET portal and add your property, providing necessary information and documents such as the units title deed, landlord’s identification, property management letter, and a recent DEWA bill.
- If the landlord is a company, provide the trade license and identification of the authorized signatory. If the host is a tenant, provide the tenancy contract.
- The DET will review your application usually within one business day. Upon approval, you’ll receive confirmation via email, and your property will be added to your portal dashboard.
- Self-classify your property based on facilities offered, following the Holiday Home Regulation Guide.
- Pay relevant fees including a one-time application fee of AED 1,500 along with AED 10 knowledge fee and AED 10 innovation fee payable to DET.
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