For years, holiday letting was the way to squeeze more income from a Dubai apartment. 2026 tested that. Tourist numbers dropped in the spring and are only partly back. Here is what the official data shows, how to compare a holiday let with a normal lease, and when each one makes sense.
By Umer Shauket, Founder & CEO, Cresco Real Estate. RERA ORN 34288. Published 8 November 2026.
The short answer
- Dubai had 6.97 million international visitors from January to August 2026, against 9.88 million in just the first half of 2025.
- Hotels filled 21.61 million room nights in the first eight months of 2026, against 22.24 million in the first six months of 2025.
- Hotel occupancy fell to 36% in March and recovered to 66% in August.
- A long term lease now often wins unless your unit can hold high occupancy at a strong nightly rate.
What happened to demand
The drop came fast. bnbme, a short stay operator, told Skift its occupancy fell from 90% on 28 February to below 20% by mid March, and other operators reported bookings nearly halved on a year earlier.
The official numbers show the recovery is real but partial. The Department of Economy and Tourism reported 6.97 million international overnight visitors from January to August 2026 and hotel occupancy of 66% in August, which it put at 89% of the August 2025 level (Dubai Eye, citing DET). Occupancy had been 36% in March (The Thursday Times). For comparison, Dubai welcomed 9.88 million visitors in the first half of 2025 alone, with hotel occupancy of 80.6% (Khaleej Times, citing DET).
| Measure | 2025 | 2026 |
|---|---|---|
| International visitors | 9.88 million (January to June) | 6.97 million (January to August) |
| Occupied hotel room nights | 22.24 million (January to June) | 21.61 million (January to August) |
| Hotel occupancy | 80.6% (January to June average) | 36% in March, 66% in August |
| Emaar UAE hotel occupancy | 80% (nine months) | 63% (nine months) |
Emaar’s own UAE hotels ran at 63% occupancy in the first nine months of 2026, down from 80% a year earlier (Arabian Business). One operator’s index put Dubai short term rental occupancy at 56.0% in the third quarter, against 64.9% a year earlier, and said 56.1% of the nights it booked were stays of 29 nights or more (First Class Property Management). That is a company figure and has not been independently verified, but it matches what the hotel data shows: fewer short visits, more long stays.
Meanwhile, long term rents held up
The long term market softened but did not collapse. Cavendish Maxwell put the average gross yield at 6.6% for apartments and 4.9% for villas in its Q3 2026 data, and 21.4% of Q3 renewals were at a lower rent (Khaleej Times). For many owners, a steady tenant now beats a calendar with gaps.
What this means for a buyer
Work out your break even nightly rate. The question is not “what can I earn per night?” but “what nightly rate do I need just to match a normal lease?”
Imagine an apartment that would let for AED 100,000 a year on a long lease. You hand it to a short stay operator who keeps 20% (an assumption for this example; check your own contract). At 56% occupancy you need about AED 612 a night just to match the lease. At 66% occupancy you need about AED 519. Furnishing, utilities, cleaning and the permit come on top. If comparable listings cannot hold that rate, the lease wins.
| Occupancy | Nightly rate needed to match AED 100,000 a year (operator keeps 20%) |
|---|---|
| 50% | AED 685 |
| 56% | AED 612 |
| 66% | AED 519 |
| 75% | AED 457 |
Holiday letting still works where visitors want to stay. Units close to the beach, the main attractions or the airport, with views and strong reviews, recover first. A standard apartment far from those draws is competing with every other unit for fewer guests.
Get the permit before you count the income. Short stay rentals need a permit from the Department of Economy and Tourism. Check your building’s rules as well. If you plan to let by the room instead, read our guide to the 2026 shared housing law first.
If you are buying now, price the unit on a long term lease. Treat holiday income as upside you have to prove, not a yield you can bank.
For the latest on renewals and rents, see our rents update.
The honest limits
Official data covers hotels, not short stay apartments, and the latest published month is August 2026. Operator figures come from their own portfolios. The break even table uses round numbers for illustration, not a forecast. Use your own lease quote, operator terms and real comparable listings.
Frequently asked questions
Is holiday letting in Dubai still profitable in 2026?
It depends on occupancy, which fell sharply this year. One operator told Skift its occupancy dropped from 90% on 28 February to below 20% by mid March. Dubai hotel occupancy recovered to 66% in August, according to the Department of Economy and Tourism. Compare your expected holiday income with a long term lease before you choose.
Do I need a permit to rent my Dubai apartment for short stays?
Yes. Short stay rentals in Dubai need a permit from the Department of Economy and Tourism, issued to the owner or a registered operator.
What nightly rate do I need to beat a long term lease?
Imagine a long term rent of AED 100,000 a year and an operator keeping 20%. At 56% occupancy you need about AED 612 a night just to match the lease, before furnishing, utilities and permit costs. At 66% occupancy you need about AED 519.
Sources: Dubai Eye, citing the Department of Economy and Tourism, 13 September 2026; The Thursday Times, 19 October 2026; Khaleej Times, citing DET, 3 August 2025; Skift, 25 March 2026; Arabian Business, 5 November 2026; First Class Property Management, 3 November 2026; Khaleej Times, Cavendish Maxwell Q3 2026; Department of Economy and Tourism, short stay permits. General information, not investment advice.