Dubai Holiday Homes in Summer: What Is Happening to Short-Term Rentals?

Summer in Dubai is not only about extreme heat — it is also traditionally a cool-down period for the short-term rental market.

Since the beginning of the year, a large volume of new units has entered the Holiday Homes segment, particularly in Downtown, Dubai Marina, and Business Bay. At the same time, seasonal demand has softened, amplified by a more tense global news environment.

Current Summer Market Conditions

• Average daily rates: down by approximately 30–40%
• Studios and 1BR units: currently renting for USD 100–150 per night
• Winter comparison: USD 250–500 per night
• Tourists are still arriving — but at lower price points

In some aspects, the pattern partially resembles the COVID downturn: occupancy is falling and owners are discounting to maintain bookings.

However, the market has also evolved — the expat-driven segment continues to grow and supports baseline demand even in softer periods.

Why Is This Happening?

📉 The drivers are largely operational and competitive:

• Owners and property managers are lowering rates to preserve occupancy and cover operating costs
• Seasonal summer slowdown combined with geopolitical uncertainty
• Hotels are aggressively competing through discounts, complimentary breakfasts, room upgrades, and flexible cancellation policies

Flight Disruptions and Demand Sensitivity

Short stays (up to 14 days) are more sensitive to flight disruptions and schedule changes.

At the same time, mid-term and long-term stays remain relatively stable.

📦 As a result, properties positioned for package stays or extended rentals typically cope better with seasonal volatility.

What Should Owners Do?

• Avoid drawing conclusions based on a single summer — the broader market trend remains positive
• According to ValuStrat, Dubai’s population increased by nearly 90,000 people in Q1 2025, equivalent to roughly 1,000 new residents per day
• Adjust pricing through September — competition is intense during the summer months
• Consider a mid-term rental strategy (6–12 months); securing a tenant may take 1.5–2 months

Key Takeaway

📌 This is temporary seasonal pressure, not a structural decline.

While short-term rates soften during summer, the underlying demand driven by expatriates and relocation to the UAE continues to expand.