Dubai’s hotel occupancy in 2025 continues to showcase the country’s undeniable superior prowess in the tourism sector. As of the first half of 2025, the city’s hotel occupancy levels hit an impressive 81%, marking a 4.5% year-on-year increase. In detail, international visitor numbers shot up by 6.1% to almost 10 million between January and June.
This increasing Dubai tourism growth has brought more visitors to the Emirate than ever, leading to a rising demand in the hospitality real estate sector. At the moment, Dubai is expected to unveil 5,000 new hotel rooms for the second half of 2025. H1 2025 Dubai hospitality sector market performance analysis reveals that the average daily rate (ADR) across Dubai’s hotels and resorts topped at AED 745, representing a 5.5% increase on the same period last year, based on a Dubai hotel industry report.
This boost in hospitality reflects positively on Dubai real estate market trends which opens a promising and unique opportunity for investors to consider property investments for short-term holiday rentals in Dubai.
5,000 New Hotel Rooms to Open in Dubai as Tourism Numbers Surge
For H2 2025, Dubai is expected to open 19 new establishments with over 5,000 rooms between them by the end of 2025. This is a significant increase from the almost 900 rooms delivered in H1 this year across 5 hotels. As of the end of 2025, Dubai is expected to see a total inventory of 157,144 keys across 748 hotels.
Dubai’s many government initiatives, strategic international partnerships, and packed events calendar and new attractions, will usher in a new wave of tourists and long-term visitors for the coming months ahead. Dubai is also known for its sustained ability to attract diverse visitor profiles while consistently elevating guests’ experiences, leading to growth in airport passenger traffic, tourist figures, hotel occupancy rates, ADR levels and overall hotel inventory.
In fact, Dubai’s hotel inventory rose from 670 establishments in 2021 to around 730 today, representing a 9.3% increase. Within the same durations, the number of keys has grown nearly 11%, from 137,600 to 152,000. The Emirate is also expected to add another 6,000 rooms in 2026 and 2027 setting up Dubai to remain as a premium, global destination of choice for both business and leisure and business travelers.
Rising Demand for Short-Term Holiday Rentals
Dubai delivers a higher standard of living, meaning most hotels are established as luxury stay options, fitted with thoughtful state-of-the-art amenities. In particular, luxury establishments saw a rise of 4.9%, supported by high-spending leisure and business visitors. Meanwhile, upscale and upper upscale hotels posted gains of 2.7% and 2.5% respectively.
To match the high demand for comfort and luxury, residents and visitors are both presented with an impressive range of properties to buy or rent in Dubai. For those who visit Dubai often for business or leisure purposes, the appeal of investing in property for short-term rentals in Dubai grows stronger with every visit.
Unlike booking a hotel room, these travelers can choose to become investors by renting out prime Dubai properties for short-term visits, thereby saving resources in the long run and building a space they can make a temporary home for every visit. They can avoid the hassle of checking into hotels and adhering to hotel limitations and arrive and leave at their convenience.
Likewise, the growing number of regular Dubai international visitors in 2025 and the growing demand for short-term holiday rental properties offers a grand opportunity for those looking to invest in the Dubai property market. With more visitors flying to Dubai more frequently. Property owners can tap into a profitable short-term holiday rental venture in Dubai based on high demand, strong yields, and a supportive regulatory environment.
Perks of Short-Term Holiday Rental Property Investment in Dubai
Indeed, investing in Dubai's short-term rental property market is a profitable and easy venture, thanks to the city’s real estate investment-friendly policies. The first step would include applying for a Holiday Home Permit through the Department of Economy and Tourism (DET), followed by buying a property, if needed, and then registering the property as a holiday home.
By selecting a property at a prime or premium location like Downtown Dubai, Dubai Marina, or Palm Jumeirah, and furnishing it to a high standard, one can earn a decent if not extravagant passive income. The average rental yields for short-term properties can be significantly higher than long-term rentals, ranging from 6% to 10% in many areas.
Therefore, by tapping into the vast investment potential in an investor-friendly environment and leveraging this strong, niche market demand, one can manage their property efficiently, either independently, or through a professional management service. This will result in maximizing profits from investing in property in Dubai for short-term holiday rentals.
NOX Holiday Homes
Clients who are interested in short-term rentals in the Dubai real estate market can contact Nox Holiday Homes, a sister company of Driven Forbes Global Properties.
With decades of experience in the hospitality industry, Nox Holiday Homes offers the highest caliber of property management and income generation in Dubai.
For further insights and comprehensive real estate advisory services, please contact Driven | Forbes Global Properties at +971800374836.
