Why Airbnb in Dubai is a Great Investment?
Dubai is not only a popular destination for tourism, but also a city with a thriving short-term rental business. The United Arab Emirates have been growing their Airbnb industry at an unparalleled pace, and investors who are looking for an option that is less mainstream than Dubai should consider other cities as well. It is worth reviewing articles like https://www.hostyapp.com/the-best-cities-for-airbnb-business-in-the-uae/ to have an overview of the country’s market in general.
The Airbnb Market in Dubai
Even though the short-term vacation rental market in Dubai is already huge, it is still growing by 5% every quarter. Right now, there is an unbelievable number of 20,500 Airbnbs operating in Dubai, the majority of which are densely packing the coast. Out of all these rentals, 85% are entire homes and apartments, 12% are private room listings, and only 3% are shared rooms. On average, they have 1.5 bedrooms and can accommodate up to 3.8 guests at a time.
The competition is undoubtedly extremely intense in Dubai, although the flow of visitors is stable as well. The annual average Occupancy Rate of local Airbnbs still manages to stay at the level of 60%. The demand in Dubai is seasonal, as the summer is notoriously hot in the emirate. Last year, the Occupancy Rates reached their lowest point of 43% in June, and their highest point of 79% in February.
Dubai is famous for its luxurious resorts and splendid accommodation. The real estate prices here are correspondingly high, but so are the rates: the annual Average Daily Rate is $172 here. As for the Revenues, an average property generates $1,942 per month throughout the year. Despite the competition, the market here is rather welcoming, and the demand is stable.
Advantages of Investing in Airbnb in Dubai
The main advantage of investing in Airbnb in Dubai is the potential such a business will hold. Even though the emirate is already an extremely demanded destination with high real estate prices, the trend does not seem to decline anytime soon. The Average Daily Rate is getting higher every year, and so are the revenues of the enterprises working in the industry. Moreover, the value of property in Dubai may easily increase in value in the future, so it is a major asset to have.
Of course, another benefit of launching an Airbnb here is the popularity of the city among tourists from all around the world. In 2021, Dubai was visited by 7.28 million tourists, while in 2022, this number reached 14.37 million. Moreover, 3.10 million visitors explored Dubai in the first two months of 2023. On top of that, there is the rapid development of the emirate that cannot be ignored. Huge investments are made to build new infrastructure for tourists, which also contributes to the increasing popularity of Dubai.
The competition in Dubai will be a tough challenge for every new entrant. It will be hard to find the first guests, as the visitors will expectedly prefer Airbnbs with established reputations on the platform. However, once the process is kick-started, a stable flow of guests is almost guaranteed, which can be tracked from the experience of new entrepreneurs who have entered the market several months ago. To have a smooth start, it will be incredibly valuable to read a blog like https://masterhost.ca/blog/, as it will provide some unique insights to the business and the industry in general.
Choosing the Right Property for Airbnb Investment
As in any other country or city, choosing the right property is vital for a successful Airbnb investment. The first decision that has to be made relates to selecting the type of property. As mentioned, the majority of listings in Dubai are entire homes, as they are usually preferred by the visitors of the emirate.
Then, it is necessary to choose a location for the vacation rental, which is arguably even more important than the type of property. Some areas of Dubai are popular among active tourists who wish to explore the emirate and its various attractions, while others are mostly used for having a vacation on the beach. Several districts are especially luxurious and attract the richest visitors of Dubai, but the real estate prices are respectively high there. No matter what the final choice is, it is important to research different districts before making it.
After picking a location, it is only left to choose the specific real estate object to purchase. While making this choice, investors should obviously take into account the experience the visitors would want to have there. Most areas of Dubai have all the necessary infrastructure for comfortable living, but it is still important to ensure it is easy to reach the most important places from the property.
Regulations and Requirements for Airbnb in Dubai
It is legal to operate an Airbnb in Dubai, but as anywhere else, it is necessary to comply with several requirements in order to launch the business. First things first, the property owner will have to register on the official online platform of the Dubai Department of Economy and Tourism. Before accepting the first guests, the investors are obliged to upload several documents related to the property, pay the corresponding fees, and receive an official certificate.
After registering on the platform of Dubai Department of Economy and Tourism, the owner will need to add their property to the website. It involves entering the specifications of the accommodation and uploading some documents. The list of copies that should be uploaded to the platform includes:
- a sales agreement;
- a passport or ID of the owner;
- a utility bill;
- additional documents depending on whether the owner is a company or a tenant.
The department will review the uploaded files shortly and add the property to the website. Once it happens, the owner becomes eligible to apply for the permit and the certificate required to launch a short-term rental in Dubai. The fee associated with the process is 1,520 AED.