By Staff Reporter
Dubai: This is turning out to be a good summer for UAE residents planning staycations rather than travel. Already, hotels in Dubai are offering per-night rates starting from Dh100 – and in some cases, even at Dh87- or Dh90 a night.
These offers are coming from the most prominent hotels on Sheikh zayed Road to upper-mid properties by the beachside.
Now, if residents want a bit more space for staycations in Dubai, they should be checking out the daily rates that renting out short-stay apartments or villas are offering this month. Because short-stay rental rates are giving serious competition to what hotels are offering on for UAE staycationers.
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“Current daily rates range between $70 (Dh256) and $350 (Dh1,284) depending on location and property type,” said Vinayak Mahtani, CEO of bnbme holiday homes. “That’s roughly one-third of what we see during the winter peak rates for Dubai short-stay rents – which is completely expected and in line with historic trends.”
There are also short-stay rental options coming in lower than the Dh250 starting range Mahtani mentions. According to leasing sources, it’s ‘not difficult’ to get spacious apartment options for 3-5 days stays at Dh100-Dh120 a day.
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This is because there are more apartments being added to Dubai’s already packed short-stay rental market, estimated to be around 40,000 units by end 2025 from about 30,000 units in the market now. The owners and leasing companies for these new units want to get bookings and occupancy at the ‘first opportunity’ and then build on that.
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“New landlords are willing to start at lower rents this summer, get some favourable ratings from their customers, and then prepare for busy season in Q4-2025,” said a senior official at a property management firm. “Many of these newer units are going below current market average to make that happen.”
As it is, short-stay rental rates in Dubai have been under pressure for the last 3-4 months. A lot of it has to do with the usual summer slowdown in incoming visitors and those booking for corporate travel. But there are industry sources who keep worrying that too many short-stay units are pulling rates down.
A new market update from Betterhomes comes up with numbers that property owners placing their units in the short-stay rental market.
Zero occupancy equals ‘losing money every day’
“An average short-term property needs to be booked around 65% to 75% of the time to cover costs and match a decent long-term yield,” the property firm states. “In Dubai, occupancy varies widely by season.
“Peak season occupancy can hit 85% to 95% in popular areas. (In the) low season, occupancy can drop to 40% or lower.
“If your property is empty, you are losing money every day.”
That’s as clear a message as it gets.
Which is exactly why owners of newly added short-stay rental properties in Dubai are willing to go lower, if that means they can get a booking.
According to Mahtani, there is no undue reason for these investors to get overly worried. “This time of year, the focus shifts from maximizing rates to boosting occupancy and ‘refining’ our operations for the upcoming season.
“Summer is when we reset — not when we expect peak returns. Staycation demand is following the same trend we’ve seen in previous summers.”
Debate over 1-year vs. short-stay leasing
Again and again, property owners in Dubai who want to rent out these units face the same question – should they place it for 1-year rentals or go with short-stay leasing, even if means there will be phases when they have to cut asking rates and even go without any bookings.
In the 1-year rental market, more properties in Dubai are nearing rate stability, whether that’s on renewals or new leases. Landlords, by and large, are sticking to 5%-10% increases, which means the sudden spikes many tenants saw at the start of this year are stabilizing.
As for short-stay rents in Dubai, everything hinges on how high rates can go in the highest demand period between September to January/early February next.
“We’re not anticipating any challenges heading into the new season,” said Mahtani. “If anything, early indicators suggest that this winter could outperform last year. Rates, like clockwork, tend to bounce back sharply — and I believe this season will be no different.”
But this summer, staycations in Dubai are coming cheap – and that applies to short-stay rental units too.
Because, as the Betterhomes market update says, “For short-term rentals, occupancy is everything.”
Source :Gulf News
