Dubai is one of the most popular tourist destinations in the world, and the numbers prove it. In 2024, over 18.7 million international visitors explored the city, and in just the first half of 2025, 9.88 million tourists have already arrived. That puts Dubai well on track to becoming one of the top three most-visited cities globally. With its modern infrastructure, stunning attractions, and a wide variety of experiences, it’s no surprise that Dubai continues to be a favourite for travellers from around the world.
As more tourists visit, there’s been a noticeable rise in demand for short-term vacation rentals. More and more people are choosing holiday homes over hotels for the comfort, privacy, and convenience they offer. In fact, demand for short-term rentals has gone up by 30% year-on-year, and investors are earning up to 20% more compared to traditional long-term rentals. Experts are predicting that this trend will continue, with the market expected to grow by another 18% in 2025.
So, if you’ve ever thought to start a vacation home rental business in Dubai, now is the perfect time.
What is a Vacation Home Rental in Dubai?
A vacation home rental in Dubai refers to a fully furnished property, like an apartment, villa, or townhouse, that is rented out to guests on a short-term basis. Unlike hotels, these homes offer a more personal and spacious experience, making them a popular choice for tourists, families, and business travellers.
Vacation homes in Dubai are regulated and licensed by the Department of Economy and Tourism (DET). If you’re a property owner or a company managing multiple units, you’ll need to get a Holiday Home License to legally operate short-term rentals.
Vacation Home Rental Market in Dubai
Dubai’s short-term rental market is booming and for very good reasons. With millions of visitors each year and world-class infrastructure, it has become one of the best cities in the world to invest in vacation homes.
Here are some key insights:
- The demand for holiday homes has increased by 30% over the last year.
- Vacation rentals are offering up to 20% higher returns compared to long-term leases.
- The market is expected to grow by 18% in 2025, according to industry forecasts.
What are Some Popular Areas for Vacation Rentals in Dubai?
Location matters when it comes to vacation rentals. Tourists often look for homes that are close to top attractions, beaches, restaurants, and public transport. Here are some of the most sought-after areas:
- Downtown Dubai: Home to the Burj Khalifa, Dubai Mall, and Dubai Fountain. Perfect for luxury-seeking travellers who want to be in the heart of the city.
- Dubai Marina: A trendy waterfront neighbourhood with high-rise apartments, cafes, and nightlife. Very popular with both tourists and expats.
- Palm Jumeirah: Known for its upscale villas and beachfront properties. Ideal for families and luxury vacationers.
- Jumeirah Beach Residence (JBR): Offers beach access and a lively atmosphere, great for short-term stays.
- Business Bay: Close to Downtown, this area attracts both tourists and business travellers.
What are the Licensing Requirements for Vacation Rentals in Dubai?
All vacation or holiday home rentals in Dubai are regulated by the Dubai Department of Economy and Tourism (DET), formerly known as the Department of Tourism and Commerce Marketing (DTCM). DET is responsible for:
- Issuing Holiday Home Licenses
- Setting standards for safety, quality, and cleanliness
- Monitoring short-term rental listings and operations
- Ensuring guest rights and smooth visitor experiences
If you want to rent out a property on a short-term basis in Dubai, you must obtain a Holiday Home License. There are two main options:
- Individual License: For private homeowners who want to rent out one or more properties they own.
- Professional License: For businesses or property management companies operating multiple units.
You cannot legally list or operate a vacation home on platforms like Airbnb or Booking.com without this license.
If you plan to operate more than one unit or manage properties on behalf of other owners, you must set up a company and get a commercial license (typically under activities like “Vacation Homes Rental”). If you’re a property owner and just want to rent your own apartment or villa, you can apply as an individual via the DET Holiday Homes portal.
What are the Documents Required?
Having the correct documents is essential to get your Holiday Home License and legally operate your vacation rental in Dubai. Here’s what you typically need:
For Individuals:
- Valid Emirates ID or Passport copy (for non-residents)
- Title deed (if you own the property)
- Tenancy contract (Ejari), if you’re renting the property yourself
- NOC (No Objection Certificate) from the landlord
- Property photos and floor plan/layout
- Dubai Electricity and Water Authority (DEWA) bill
- Signed undertaking form
For Companies:
- Trade license form
- Tenancy contract (Ejari) or Title deed for each property under management
- NOC from property owners (if you’re managing on their behalf)
- Company documents (MOA, license, and shareholder details)
- Photos and layout plan of each unit
- Emirates ID or Passport copies
All documents must be valid and in English or Arabic. The authority may request additional documents during the application or inspection.
How to Start a Vacation Home Rental Business in Dubai?
Here’s a step-by-step process to help you launch your short-term rental legally and successfully:
Step 1. Decide Your Business Model
Start by choosing how you want to operate:
- Individual Owner: Rent out your own property.
- Professional Operator: Manage multiple units or properties on behalf of other owners (requires a company setup).
Step 2. Get Your Trade License (for Companies)
If you’re setting up a business to operate vacation rentals, you’ll need a trade license from the Department of Economic Development (DED). The most common activity is Vacation Homes Rental or Leasing of Holiday Homes.
You can set this up either as a Mainland or Free Zone company, depending on your long-term plans.
Step 3. Apply for the Holiday Home License
All operators (whether individuals or companies) must register with the Dubai Department of Economy and Tourism (DET) to get a Holiday Home License. You can register and manage your property through DET’s Holiday Homes portal.
Step 4. Prepare the Property
Make sure your vacation home meets DET’s quality and safety requirements:
- Fully furnished with essential appliances and amenities
- Clean, well-maintained, and guest-ready
- Fire extinguishers and safety alarms installed
- Clear check-in/check-out instructions
DET may inspect the property before or after you start operating.
Step 5. List the Property on Vacation Rental Platforms
Once licensed, you can list your property on platforms like:
- Airbnb
- Booking.com
- Vrbo
- Dubizzle
- Your own website (optional)
Include high-quality photos, clear descriptions, pricing, and house rules.
Step 6. Manage Operations and Fees
Once your property is licensed, you are ready to start renting it out.
- Guest registration: You must participate in the electronic guest registration program and provide guest data to the DET.
- Tourism Dirham Fee: This is a per-night, per-room fee (e.g., AED 10 for “Standard” and AED 15 for “Deluxe”).
- Municipality Fee: A 10% tax on all bookings.
- Maintain the property: Keep the property well-maintained and clean, as you are responsible for providing a comfortable and safe environment for your guests.
- Display the permit: The official DET registration certificate must be displayed in the property at all times.
How Much Does It Cost to Start a Vacation Home Rental Business in Dubai?
If you want to rent out your property short-term, you’ll need a Holiday Home License, which costs around AED 1,500 per year, and you’ll also need to pay a permit fee of AED 300 per bedroom each year. Additionally, there’s a Tourism Dirham fee (AED 10–15 per room per night) that guests pay.
However, if you plan to manage multiple properties or want to set up a business, you’ll need a trade license. This can cost between AED 12,000 to 18,000 annually. Other one-time costs may include Ejari registration (AED 195) and a security deposit of around AED 2,000 to 3,000. Keep in mind that 5% VAT is also applicable to services like cleaning or bookings.
Your property needs to be fully furnished and guest-ready. Depending on your style and quality preferences, furnishing can be a one-time but significant expense.
Ongoing costs like cleaning after each guest stay, general maintenance, and small repairs will be part of your monthly expenses. Hiring a reliable cleaning team is essential for good reviews and repeat bookings.
For more accurate cost breakdowns, get in touch with experts at Shuraa Business Setup.
Why Invest in a Vacation Rental Business in Dubai?
Dubai’s booming short-term rental market is turning properties into profitable investments for owners.
1. Dubai’s Booming Tourism Industry
Dubai attracts millions of visitors each year with its luxury shopping, iconic landmarks, beaches, and year-round events. Tourism keeps growing, which means a constant flow of guests looking for comfortable stays.
2. High Demand for Short-Term Stays
Travellers increasingly choose vacation rentals over hotels because they offer more privacy, space, and a homely atmosphere. This demand stays strong all year, especially during holiday seasons and major events.
3. Attractive Returns on Investment
Properties in prime locations like Downtown, Marina, and Palm Jumeirah can bring in impressive rental yields. Short-term rentals often earn more than long-term leases, especially with good property management.
4. Flexible Use of Your Property
You’re not tied to a fixed lease. You can rent your property when it’s convenient and keep it for personal use whenever you want, ideal for part-time residents or frequent visitors.
5. Rising Popularity of Remote Work & Digital Nomads
With Dubai’s flexible visa schemes and appeal as a work-from-anywhere city, more professionals are staying for weeks or months at a time, preferring fully furnished vacation rentals over hotels.
The Easiest Way to Start a Vacation Rental in Dubai
Dubai’s vacation rental market is booming, and it’s a great chance for property owners and investors to earn extra income. With millions of tourists visiting every year, the demand for short-term stays is only going up. If you have a property or plan to buy one, this is the right time to get started.
Shuraa Business Setup can take care of everything for you – from getting your vacation rental license and registering with DTCM to making sure you meet all the rules and pass inspections. We’ll guide you through every step so you can focus on welcoming guests and enjoying the returns.
Contact Shuraa for a free consultation, and let’s get started.
