Dubai’s rental market has always been attractive, but the rise of short-term stays and holiday homes has created a new debate among investors: Is Airbnb more profitable than long-term renting? In 2025, with tourism booming, flexible travel increasing, and remote workers choosing Dubai for months at a time, this question is more relevant than ever.
Before diving into the details, many property owners and investors start by checking potential earnings through a reliable tool like GrowProp’s estimator tool because understanding baseline performance makes the short-term vs long-term decision much easier.
In this guide, you’ll find a clear, simplified comparison of both models, with real-world insights into revenue, risks, occupancy, and management requirements. Whether you’re a homeowner deciding what to do with your property or an investor planning your strategy, this breakdown will help you choose confidently.
Understanding the Two Rental Models
Airbnb/Short-Term Rentals
Short-term rentals in Dubai allow owners to rent out their unit on a nightly or weekly basis. This model is heavily influenced by tourism, seasonality, major events, and business travel. With the help of a professional holiday home company or an Airbnb host service, property owners can automate pricing, guest communication, check-ins, cleaning, and compliance.
Characteristics of Airbnb in Dubai:
- Higher income potential
- Higher hands-on requirements (unless using a management company)
- Requires a holiday home permit
- Income fluctuates with travel seasons
Long-Term Rent
Long-term rentals follow the traditional leasing structure: a single tenant signs a yearly EJARI contract and pays rent in 1–4 cheques.
Characteristics of long-term renting:
- Stable, predictable income
- Less management and lower cleaning/maintenance costs
- No guest turnover
- Lower risk of vacancy
- Lower income potential compared to short-term rentals
Comparing Profit: Airbnb vs Long-Term Rent
Revenue Potential
With Dubai’s surging tourism market, exceeding 17 million visitors in 2024 and projected to grow in 2025, Airbnb and holiday homes can produce significantly higher returns compared to long-term rentals.
Typical Income Comparison (2025 estimates):
| Property Type | Long-Term Rent | Airbnb/Short-Term |
|---|---|---|
| 1BR Dubai Marina | AED 90,000–110,000 yearly | AED 120,000–180,000 yearly |
| 1BR Downtown | AED 95,000–120,000 yearly | AED 140,000–190,000 yearly |
| Studio JVC | AED 45,000–55,000 yearly | AED 60,000–85,000 yearly |
Airbnb wins purely in revenue, but profit also depends on expenses, which we break down next.
Use the GrowProp Airbnb estimator tool to calculate your exact short-term rental income for your apartment.
Cost Differences: What You Actually Keep
Costs for Airbnb/Short-Term Rentals
Short-term rentals come with additional operating expenses such as:
- Cleaning + linen service
- Guest amenities
- DET holiday home license
- Furnishing & replacements
- Utility bills (DEWA, Internet, gas)
- Commission to a holiday home company if managed
- Tourism Dirham fee (paid by guests, but you must collect and remit it)
If managed through an Airbnb host service, fees typically (range from:
- 12%–20% for revenue-only management
- Up to 25%–30% for full-service hosting (premium tier)
Costs for Long-Term Renting
Long-term rentals involve:
- Minor maintenance
- No cleaning/guest turnover
- Utilities are usually paid by the tenant
- No licensing or tourism fees
- Rarely requires furnishing
Verdict: Airbnb has more expenses, but its earning potential is higher. Long-term rental has fewer expenses but caps your income.
Occupancy & Seasonality
Airbnb Occupancy (Varies by Area)
Dubai’s strongest Airbnb demand areas consistently include:
- Dubai Marina
- Downtown Dubai
- Palm Jumeirah
- Business Bay
Average occupancy ranges from 70%–90% in peak seasons and 55%–70% during low seasons (summer).
Seasonality impacts your monthly revenue:
Peak season (Oct–Apr): highest prices
Mid-season (May & Sep): stable occupancy
Low season (Jun–Aug): discounted rates but consistent bookings with proper pricing
A good Airbnb host service typically uses dynamic pricing to maintain occupancy.
Long-Term Rental Occupancy
Predictable. One tenant. Zero seasonality impact.
Verdict:
Airbnb requires an active pricing strategy; long-term rent is passive.
To see how occupancy affects yearly profit, you can test different scenarios using the GrowProp estimator tool.
Management Effort: Which One Is Easier?
Airbnb/Short-Term
Short-term hosting requires:
- Listing creation and optimization
- Guest communication
- Cleaning coordination
- Reviews and ratings management
- Maintenance handling
- Check-ins/check-outs
- Dynamic pricing updates
But this entire workload can be outsourced to a holiday home company. These companies are designed for:
- 100% hands-off hosting
- 24/7 guest communication
- Price optimization
- Professional photos
- Full compliance handling
Long-Term Renting
Effort level: minimal. You only deal with:
- Leasing
- Occasional repairs
- Renewal or eviction
- Deposit disputes
Verdict:
Airbnb requires more involvement unless you use a airbnb management company. Long-term renting is simpler and less time-consuming.
Risk Comparison
Airbnb Risks
- Income can fluctuate
- Bad reviews can impact bookings
- Property wear increases
- Minor damages from guest turnover
- Market shifts (tourism dips, regulations)
Long-Term Risks
- Bad tenants (eviction is slow)
- Late payments
- Long-term commitments
- Market price stagnation
Verdict:
Airbnb = financial fluctuation risk, whereas long-term = tenant reliability risk. Both have risks, just different types of them.
ROI Comparison (Which Makes More in 2025?)
Long-Term Rent ROI (Average)
5%–7%
Airbnb ROI (If Managed Properly)
7%–12% (sometimes 13%–15% for well-furnished Marina, Downtown, and Palm units)
The gap is significant. Even after paying an Airbnb host service, short-term rentals outperform traditional renting in most central Dubai areas.
But ROI depends heavily on:
- Location
- Furnishing quality
- Occupancy
- Seasonality
- Pricing strategy
Which is why calculating ROI before choosing a strategy is essential.
Simple Summary: Which One Should You Choose?
Choose Airbnb If:
- You want higher returns
- Your unit is in a tourist-heavy location
- You don’t mind seasonal fluctuations
- You will hire a quality holiday home company
- Your property is furnished or designed for guests
Choose Long-Term Renting If:
- You want hands-off income
- Predictability matters more than maximum profit
- Your property is outside prime short-term areas
- You don’t want to invest in furniture or ongoing cleaning
Conclusion
In 2025, Airbnb offers significantly higher income potential, especially in areas like Marina, Downtown, Palm Jumeirah, and Business Bay. Long-term renting provides stability and simplicity, but rarely matches the ROI of a well-managed holiday home. Your choice ultimately depends on whether you value steady income or maximum profitability.
Before committing to either strategy, the smartest first step is to run your numbers, see what your unit can earn on Airbnb vs traditional annual rent. You can do that instantly using the GrowProp estimator tool, which gives a clear ROI comparison for your specific property in seconds.