How to Start an Airbnb Business in Dubai | Step-by-Step Setup Guide 2025

Dubai is one of those cities where luxury meets opportunity and not solely for the wealthy tourists.

The city draws in over 17 million visitors, from upper-echelon business travelers to the thrill-seeking families on vacation.

To a couple of shrewd entrepreneurs, this steady stream of visitors spells profit.

Due to its booming popularity, short-term rentals are pretty much the go-to accommodation: tourists nowadays want something more like their own home, with flexible arrangements, rather than your generic hotel.

Either a one-bedroom apartment in Jumeirah Lakes Towers or that beachside villa in Palm Jumeirah, the people look for comfort, convenience, and a local experience, all available through Airbnb.

This article provides a breakdown of starting an Airbnb business in Dubai, the legal requirements involved, the financial aspects to consider, and procedural steps.

If you intend to turn your own property or a rented one into some steady income, the procedure here describes how to do it right.

Why Dubai is a Prime Location for an Airbnb Business

Tourism in Dubai remains resilient, one of the few cities bouncing back from global hiccups stronger every time-whether that has been during economic downturns or pandemics.

Major attractions such as Burj Khalifa, Desert Safari, and luxury malls tempt tourists to drop in throughout the year.

Such constant tourist flow makes short-term rentals a very good option. If you think of hotels, although there are plenty, they cannot be said to fit every budget or style.

Hence, people would turn to Airbnb for anything from chic studios to fully serviced villas.

According to Knight Frank, Dubai appears to be one of the best rental yield cities, with some properties yielding a yearly return of 6 to 10 percent.

Dubai offers a perfectly symbiotic environment for business also. With its clear regulatory framework, investor-friendly policies, and streamlined licensing systems, it has never been easier to start a property rental business.

Another special aspect here is that the range is vast: entrepreneurs can list everything from cheap mid-range homes in Deira to high-end luxury in Dubai Marina.

Consider the case of Nadia, a freelance photographer who turned her spare room in Business Bay into an Airbnb listing.

With little expenditure on furnishing and a price strategy to match, she ended up fully booked within her first month, even during the shoulder season.

Legal and Regulatory Requirements for Starting an Airbnb Business

Are you wondering how to legally operate an AirBnb business in Dubai? The very first license entry you need is the Holiday Home License.

The Holiday Home License is issued by Dubai Department of Tourism and Commerce Marketing (DTCM) and has to be secured for any property put up for listing on Airbnb.

Holiday Home License:

This license legitimizes your business and ensures guests are protected under local laws. It also signals professionalism, something travelers appreciate when booking.

Who Can Apply:

Owners of an apartment or a villa can apply and register the property for AirBnB business in Dubai. The only confirmation they require is the  property register document under the owners name & Emirates ID.

Even tenants who has register for property as lease can register for AirBnB under certain conditions.1. Secure a No Objection Certificate (NOC) from the landlord in addition to the tenancy contract. 

Sometimes you may also require to register your property with RERA (Real Estate Regulatory Authority) to ensure your listing complies with all broader property laws and restrictions pertaining to Dubai.

Compliance Matters:

Airbnb properties have to comply with minimum safety and quality standards. Standards include:-

• Fire safety equipment, such as fire extinguishers and smoke alarms
• Regular cleaning protocols
• Adequate insurance coverage
• Transparency in pricing, especially when it comes to the Tourism Dirham Fee, a nightly guest tax that must be collected and remitted.
  

Failing to meet these standards can lead to penalties or suspension of your license. As a tip, hire a consultant or service provider to help with initial registration if you’re new to Dubai’s legal system.

Steps to Set Up an Airbnb Business in Dubai

To set up an Airbnb business in Dubai, first obtain a holiday home license from the Dubai Tourism Department. Ensure your property is located in an area that permits short-term rentals. Register your property on the Dubai Tourism website and comply with local regulations, including safety and insurance requirements. Furnish and maintain the property to attract guests. Finally, list your property on Airbnb and manage bookings professionally for success.

Step 1: Choose Your Business Jurisdiction

You can either register your business in the Mainland or a Free Zone.

• Mainland: Gives you the flexibility to rent out any property within Dubai. However, you’ll need a local sponsor.
  
• Free Zone: Offers 100% ownership and faster setup but restricts operations geographically.
  

Most Airbnb hosts prefer the Mainland route due to fewer operational limits.

Step 2: Apply for the Holiday Home License

Head to the DTCM portal and submit your application. Required documents include:

• Passport copy or Emirates ID
• Title deed or tenancy contract with NOC
• Property floor plan
• Photos of the property

Processing usually takes 3 to 5 business days.

Step 3: Property Registration and Inspection

DTCM officials will inspect to ensure your property meets health and safety standards. This includes checking for:

• Smoke detectors
• Emergency contact information
• Cleanliness and condition of amenities
  

A friend of mine, Khaled, recently had to delay his listing because he forgot to install smoke detectors. It’s a small detail, but one that can cost you time and bookings.

Step 4: Listing on Airbnb

Once approved, set up your Airbnb account. Use high-resolution images, write a clear and honest description, and be upfront about house rules. Small touches like providing a local guidebook or snacks can go a long way in winning guests over.

Financial Considerations for Your Airbnb Business

Startup Costs:

Setting up isn’t free, but it’s manageable. Here’s what to expect:

• Holiday Home License: AED 1,500–2,500 (annual)
• Furnishing and décor: AED 10,000–25,000 depending on size and quality
• Insurance and safety compliance: AED 1,000–3,000
  

Ongoing Expenses:

• Utilities (DEWA, internet, gas): AED 1,000–2,000/month
• Cleaning and laundry services: AED 500–1,500/month
• Airbnb service fee: ~3%
• Optional: Property management fee (if outsourced): 10–20% of revenue
  

Revenue Streams:

Pricing strategy is key. Most hosts adjust rates dynamically using Airbnb’s pricing tools or third-party apps like PriceLabs.

During Expo 2020, property owners in Downtown Dubai charged 2–3x the usual nightly rate. Those who adapted quickly made significant profits.

Don’t forget the Tourism Dirham Fee – AED 10 to 15 per night depending on the property classification. This must be shown separately on invoices and paid monthly to DTCM.

Managing Operations and Customer Service

Booking Management:

Using tools like Guesty or Smartbnb can automate check-ins, calendar syncing, and message replies. However, personal attention still matters. A manual confirmation message makes guests feel welcome.

Communication:

Guests expect swift replies. A host I met once got a five-star review just for responding within five minutes to a late-night query about the Wi-Fi password. Communication can make or break your rating.

Cleaning and Maintenance:

Hire professionals to keep things spotless. Include fresh linens, toiletries, and a backup key. A dirty bathroom or broken AC can quickly lead to negative feedback.

Reviews:

Encourage guests to leave reviews after their stay. Respond to all reviews, especially the negative ones, with empathy and a solution.

Marketing Your Airbnb Business

Build an Online Presence:

Even if Airbnb drives the most traffic, having an Instagram account or simple website boosts credibility. Share before/after shots, guest testimonials, and nearby attractions.

Optimize Your Listing:

• Use real photos, not stock images
  
• Highlight key features: balcony view, proximity to the metro, etc.
  
• Keep the pricing competitive and offer discounts for long stays
  

Collaborate:

Work with travel influencers or local tour companies. A host I know offered free airport transfers in exchange for Instagram exposure and doubled his bookings the following month.

Ads and Campaigns:

Targeted Google Ads and Facebook promotions can help during slow seasons. Airbnb also allows hosts to offer special promotions directly on the platform.

Property Maintenance and Quality Control

Don’t treat this as a passive income. Your property needs consistent attention.

• Conduct inspections monthly
• Fix issues quickly: leaky faucets, worn-out mattresses, faulty lights
• Upgrade periodically, adding a coffee machine or smart lock can set you apart
  

Guests want reliability. Something as simple as fast Wi-Fi or blackout curtains can turn a one-time guest into a regular.

Challenges and Risks of Running an Airbnb Business

Like any business, Airbnb hosting comes with its fair share of hurdles.

• Regulation changes: Dubai authorities occasionally update hosting rules. Staying compliant is crucial.
• Seasonal dips: Bookings slow down in the peak summer heat. Consider monthly discounts or long-stay offers during off-peak months.
• Competition: With more people entering the market, you’ll need to offer something unique—whether that’s location, design, or service.
• Guest issues: Not every stay will be perfect. Learn to handle complaints diplomatically.
  

Conclusion

Starting an Airbnb business in Dubai is a smart move – if done correctly. From understanding the legal requirements to maintaining your property and managing guests, there’s a clear path to turning your space into a revenue-generating asset.

The key is doing things by the book and investing in quality. If you follow the steps above and commit to delivering a great guest experience, you’ll not only build a profitable business but also become part of Dubai’s growing hospitality landscape.