Occupancy rates in the UAE’s holiday home industry are increasing despite the number of listings also soaring over the past three years, indicating strong consumer demand for a sector still in its infancy.
Yet such are the costs associated with running a holiday home that property owners may prefer the earnings stability that a long-term tenant provides, despite Dubai and Abu Dhabi each attracting more overnight visitors so far this year compared with the corresponding period of 2024.
“A holiday letting may have a slight edge in terms of net profit, but it depends on the area and unit size; a one-bedroom apartment is much more sought after than a studio, for example,” says Haider Tuaima, head of research and managing director at Dubai’s ValuStrat.
“The advantage of letting your property as a holiday home is that it provides more flexibility, you can sell it as a vacant unit or move in yourself.”
Holiday home rentals were formerly clandestine, but Dubai introduced regulations permitting them for institutional owners in 2013. Three years later, it allowed individual property owners to do likewise. Abu Dhabi implemented similar regulations in 2020.
The number of UAE holiday home listings surged to a peak of 43,884 last December from 14,459 in January 2022, according to analysts PriceLabs.
This total has fallen for six successive months to 34,398 in June. Fluctuations are due partly to property owners delisting their unit intermittently, perhaps to live there themselves or to sell it.
“Sometimes, people have bought off-plan and have now received the keys, they want to sell, but, in the meantime, rent it as a holiday home,” says Tuaima.
An AGBI analysis of PriceLabs’ data shows the UAE’s private holiday accommodation industry is thriving, especially during the peak tourist season of November to March. Occupancy is up, as is the revenue per available room and the average daily room rate (ADR).
Although peak seasons vary worldwide, the UAE’s holiday home metrics compare favourably with other popular locations. In May, the country achieved a greater occupancy level than London, New York State and California, while its average ADR was higher than Singapore and Madrid.
However, average occupancy masks large variance according to area, with peripheral locations dragging the average lower, says Tuaima. Similarly, some listings allow for single-night stays whereas others might have a one-month minimum.
As such, “there are a lot of nuances within the overall occupancy data,” says Tuaima.
Nevertheless, holiday homes on average lie empty 38% of the time, which suggests some oversupply and is probably a cause for the net decline in listings.
This competition for guests has caused average daily room rates to be little changed over the past few years. In the first three months of 2022, the earliest available data, the ADR was $194. This peaked in the 2023-24 winter season at $221 but fell to $207 last winter, PriceLabs data shows.
Such figures mean that homeowners would not always make a bigger profit through holiday home lettings versus letting their unit to a long-term tenant, Tuaima says – holiday homeowners pay service charges, municipality fees and utility bills, plus 20-25% of revenue if using a management company.
Conversely, a long-term tenant would pay most of these costs, while a management company is usually unnecessary. Also, monthly rental income does not vary, while the average Dubai rental yield was 5.3% in December which is the second highest globally among major international cities, according to estate agent Savills.
Focus on Dubai
The UAE’s holiday home sector is concentrated in Dubai. The emirate has about 23,000 listings, up 40% since 2022, ValuStrat estimates. That compares with 154,000 hotel rooms and hotel apartments, according to Dubai’s tourism office.
Of Dubai’s holiday homes, about 30% are in Dubai Marina and Jumeirah Beach Residence. One-bedroom apartments represent about 50% of all Dubai holiday homes listings. Two-bedroom units account for around 25%, according to ValuStrat data.
For a detailed perspective on the property market, visit: Dubai - VPI Residential Capital Values - June 2025
