Short Term Rental FAQ
1. Who regulates the Holiday Homes sector in Dubai?
Department of Economy and Tourism in Dubai (DET) regulates the Holiday Homes sector in Dubai. Unlike many cities around the world, the DET was swift to regulate the sector with very clear guidelines and definitions. In many respects, Holiday Homes are regulated in a similar way to Hotels, though they do have their own explicit governing documents and bylaws. The latest Resolution issued by DET can be found here It is worth noting, that while the DET issues the Resolutions governing Holiday Homes, it is Dubai Economic Depart who issue licenses to Professional Holiday Home operators.
2. Is a "Holiday Home" the same as a "Short Term Rental" or a "Vacation Rental"?
Department of Economy and Tourism in Dubai (DET) officially uses the term "Holiday Homes" to reference the sector. However, the use of the term "Holiday Homes" can be slightly confusing, as a huge portion of people who stay in short term accommodations are not on 'Holiday' as the name would imply. This is particularly true during the pandemic, when many residents wanted flexible accomodation because of jobloss etc., and 'holidays' were virtually nonexistent. See Gulf News article for reference. Broadly, all these terms imply the same thing: a furnished, residential dwelling, that is operated for the purpose of hosting guests for less than 90 days. We prefer the term "Short Term Rental" to describe the sector, because its generic enough to describe all the different reasons people chose to stay (vacation/holiday, business, resident stays, etc.).
3. Is a license required to operate a Short Term Rental / Holiday Home in Dubai?
A property owner (or 'authorize tenant'), can legally operate a single Holiday Home without a license, according to DET guidance. A Holiday Homes license is required if more than one property is going to be operated by the same individual. See the most recent DET guidelines here for more details.
4. Can I run a Short Term Rental myself?
The short answer is, yes. However, operational realities will quickly make the average person reconsider. A few 2am check-ins, overnight waterheater problems and incessant guest questions ("How do I turn the TV on") makes most people realise leaving it to the Pros is a better option.
5. How much can I make with my Short Term Rental?
Not every property is well suited for Short Term rental. That being said, it's not uncommon for property owners to earn 30-40% more than with traditional long term contracts. Be wary of so called "Revenue Estimators", as any operator who is giving a revenue estimate without seeing your property is not being entirely forthright. Individual characteristics of a property have a big impact on earning potential (views, amenities, etc.)
6. Is there a major difference in how STR operators perform for their clients?
Yes! The sector is primed for consolidation, as the barriers to entry are low which has led to an overabundance of operators (many whom do not have the sophistication to consistently deliver returns). Successful operators need to act with the sophistication of major hotel brands to compete in what has become a very competitive market.
7. How big is Dubai's Short Term Rental market?
As of March 2022 there were 14,735 Active Dubai properties reported across Airbnb / VRBO (according to airdna.com). For context, Dubai has just over 100,000 Hotel rooms on offer, which means Holiday Homes represent a sizable portion of the accommodation market in Dubai. Furthermore, in the month of March 2022, over 121 Million AED in revenue was reported by Airdna across Dubai. Make no mistake, a combination of proactive regulation and booming tourism numbers (Covid-19 aside), means STR will be a force to be reckoned with for years to come.
8. What happens if a guest damages my Short Term Rental property?
Broadly speaking, this concern is overblown. We've hosted over 10,000 stays across two continents, with no meaningful damage inflicted on our properties (that's not to say it never will happen). Click here to learn more.