Is Airbnb Still Worth It in 2025?

Since 2020, the short-term rental market has experienced a wild ride—enough to make any property owner wonder, “Is Airbnb still worth it in 2025?

The short answer is a big YES, but like any good investment, it’s worth weighing the pros and cons.  

As Dubai’s leading Airbnb management company, we’ve had firsthand experience with everything Airbnbs – managing them, marketing them, and overall, making them profitable.

If you’re an investor looking to get into Airbnbs and the vacation rental market, this blog is for you.

We’ll breakdown — the good, the bad, and the awesome—so you can decide if investing in Airbnb is still worthwhile in 2025.

The Short-term Rental Market in 2025: What’s Trending?

The short-term rental market took a hit during the COVID-19 pandemic — dramatically altering travel patterns and guest expectations. 

However, as we move into 2025, the market is stabilizing and showing strong signs of continued growth. According to AirDNA, the market is poised to see steady growth in 2025. While the specific numbers vary by region, the overall trend indicates a healthy and maturing market.

Although Airbnb listings increased by 15% globally, in Q1 2024, major cities like New York, London, and Paris are gradually approaching saturation.    

Consequently, investors are seeking better opportunities in suburban and rural areas with low competition and increased demand. In Dubai, areas like Dubailand, Al Furjan, and Damac Hills offer such potential. 

That aside, here are top trends in the short-term rental market for 2025:

1. Experiential Travel: Guests are increasingly looking for experiences. Moreso now than ever, there’s an increased demand for properties that offer more than just “a place to sleep.” We’re talking unique amenities, local experiences, and personalized touches that set listings apart.
2. Value-Driven Bookings: While luxury properties remain popular, there’s also growing demand for budget-friendly Airbnbs that don’t compromise on quality or comfort. This is especially true with the growing increase in solo travel and vacations.
3. Smart Homes: Smart home technology and other “tech-enabled” amenities are becoming increasingly desirable. With the rise of workstations and digital nomads, there’s more attention on Airbnbs with dedicated workspaces. But not only that. Smart gadgets, ultra fast Wi-fi, and home automation are expected in 2025 Airbnbs.
4. Sustainability: Climate change is happening everywhere, and there’s now a need to be eco conscious. Properties with sustainable practices like energy efficiency, waste reduction, and the use of eco-friendly products, are poised to attract eco-conscious travelers in 2025 and beyond.

Is Airbnb Worth It?: 4 Reasons Why Airbnb is Attractive in 2025

Image by Airbnb

In a press release in Q4 2024, Airbnb Co-Founder and CEO Brian Chesky mentioned:

“In 2024, we outpaced the travel industry’s growth, with revenue, nights booked, and GBV all accelerating in Q4. This growth reflects the significant improvements we’ve made to Airbnb’s usability, affordability, and reliability—and we’re excited to build on this momentum in 2025.”

But that aside,

Is investing in Airbnb still worth it in 2025? YES. And here are four reasons why;

1. Increased Demand

While there are other booking platforms like Booking.com, VRBO, Expedia, TripAdvisor etc, let’s look at Airbnb’s figures.

In Q4 2024, Airbnb’s revenue increased to $2.5 billion from $2.2 billion in Q4 2023, primarily driven by an increased demand in nights stayed and Average Daily Rate (“ADR”).

Without doubt, travel is booming.

People are itching to explore, and many are choosing the unique, local experiences that Airbnbs offer, over traditional hotels. Coupled with the “Airbnb Icons” category – which features stays with the biggest celebrities in Hollywood and Music, Airbnb has more demand than ever.

Image by: Airbnb

Recent data from AirDNA also shows that demand for holiday homes, measured by nights booked, grew by 9% in 2023 compared to the previous year. That’s a good “trend” that people are not just traveling, but are choosing Airbnbs. 

And guess what? 

That trend is expected to continue into 2025. People are craving authentic experiences, and that’s exactly what many Airbnbs provide.

2. High Income Potential

With increased demand for Airbnbs and holiday homes – comes increased income. Whether you’re looking to supplement your existing income or turn Airbnb into a full-time gig, Airbnb has that revenue potential. 

The rise of digital nomads and the “work from anywhere” trend is also creating a new market for constant stays, providing a consistent and reliable income stream that goes beyond the typical tourist season. 

In fact, many hosts are finding that their Airbnb income surpasses what they could earn from a traditional long-term rental.

Consider Anthony, who struggled to manage his home as a long-term rental. After handing over his apartment to us, he made a 15% ROI in only 6 months. This demonstrates the potential of Airbnb, even in 2025 and beyond.

To better understand this point, here’s a table showing the difference between long-term rentals and Airbnb rentals in Dubai.

3. Flexibility

When you are an Airbnb host, you get a flexibility that’s hard to find in other business models.

You’re able to set your schedule, decide when your property is available, and YOU have complete control over pricing.

Want to block off a few weeks for a personal vacation? No problem. Need to adjust your rates based on local events or seasonality? You got it. This level of control is hard to find in other investment models.

Even better, this flexibility increases when you outsource “hosting” to a property management company. At Homevy, many of our property owners report having more freedom compared to managing their Airbnbs by self.

4. Networking Opportunities

Airbnb hosting in Dubai allows you to meet people from all over the world. 

You get to meet travelers, entrepreneurs, digital nomads, and families from different backgrounds. This allows you to form connections that can lead to new friendships, business opportunities, and collaborations.

Imagine meeting a guest who becomes a valuable contact in your profession.

And in a world where “networking” has become increasingly prevalent, having a business that “connects” you to people from all over the world – has several advantages.

Emerging Airbnb Markets to Watch in 2025 (UAE)

In the UAE, established tourist destinations like Dubai already have their appeal and target audience. However, emerging markets that offer a lower cost of entry, less competition, and growth potential often bring more ROI in the long run.

Many of our property owners at Homevy are considering the following areas in the UAE, for 2025 and beyond:

1. Ras Al Khaimah: The UAE’s “northernmost” emirate is investing heavily in tourism, with a focus on adventure activities, natural beauty, and cultural experiences. The Ras Al Khaimah (RAK) International Airport expansion in 2022 further enhanced its accessibility. This is a major advantage for those looking to draw in international tourists.

2. Al Ain: Known as the “Garden City” of the UAE, Al Ain is a city in the emirate of Abu Dhabi, and it offers a more traditional and cultural experience compared to Dubai. Its historical sites, parks, oases, camel market, and proximity to the Hajar Mountains make it an attractive destination for tourists seeking a different kind of Emirati experience. It’s not surprising that it was chosen as the Gulf Capital for Tourism for 2025 by GCC Tourism Ministers.

3. Fujairah: This emirate on the east coast has stunning beaches, coral reefs, and a more laid-back atmosphere. It’s the perfect location for staycations and weekend getaways. Its proximity to Dubai also makes it a viable option for residents (and tourists) looking to escape Dubai’s hustle and bustle.

4. Abu Dhabi: With the newly built rail connection to Dubai, Abu Dhabi is poised for an increased Airbnb demand. But not that alone. Its affordable property prices, amenities, entertainment spots and family-friendly environment makes Abu Dhabi an attractive option for short-term and long-term rentals.

Winning Strategies for Airbnb Hosts in 2025

At this point, you’re probably starting to consider running an Airbnb business. If you truly are, here’s how to set yourself up for success in 2025:

1. Use Professional Photography

Photo by Marcelo Chagas

Pictures are everything, especially on Airbnb. High-quality, professional photos are super important, as they determine if a potential guest will book your property or not. Hire a professional photographer if you can. It’s worth the investment. If you can’t, learn the basics of good photography, including lighting, composition, and staging.

2. Write Compelling Airbnb Descriptions

Your property listing description “sells” the experience of staying at your property. Don’t just list the features, paint a picture. What makes your place special? What kind of “vibe” does it have? What can guests expect in the neighbourhood? 

Use descriptive language, highlight unique selling points, and speak directly to your target audience. Also, use relevant keywords in your description to improve your search ranking.

3. Equip Your Property with Must-Have Amenities

Guests in 2025 have high expectations. You need to provide essential items for Airbnb, while STILL adding extra touches to make your listing stand out. 

Fast, reliable Wi-Fi is an absolute must. No negotiation there. A well-equipped kitchen, comfortable bedding, and a clean, stylish space are also necessities. Beyond these basics, consider adding; 

• Smart home features
• Workspaces
• Eco-friendly touches

4. Set the Right Price for Your Airbnb

• Peak Season Performance (Oct-April): Properties under Homevy’s management achieved 85-95% occupancy with strategic 30-50% rate increases.
• Summer Strategy (June-Aug): Our flexible pricing model maintained 60-65% occupancy through targeted promotions and extended-stay discounts of 15-25%.
• Event-Based Revenue: During the Dubai Shopping Festival 2024, Homevy-managed properties saw 45% higher revenue compared to regular peak season rates.

But how did we achieve these results?

We used our comprehensive pricing strategy and here’s how you can do the same.

1. Use Our Str-vs-Ltr Calculator: With Homevy’s str-vs-ltr tool, you can easily determine the optimal price for your holiday homes. This tool shows you how to price your rental each day – to hit a set target. For example, if you want to make 20% more ROI than long term rentals, the tool will show you the prices to set in peak/low season. While the tool shouldn’t be used solely, it gives you an average baseline to stay profitable.
2. Set Dynamic Pricing: Third-party tools like PriceLabs and Beyond Pricing help with “on-the-spot” pricing. These tools can be integrated with Airbnb, Booking.com, and VRBO. They automatically adjust your rates based on demand and supply – factoring things like local events, seasonality, and competitor pricing.

5. Have a Seamless Check-in Process

Photo by RDNE Stock project

First impressions matter, and a smooth check-in process sets the tone for a positive guest experience.

Provide a variety of check-in options to suit different guest preferences. A lockbox or a smart lock allows for contactless entry, which many guests appreciate for its convenience. If you prefer a personal greeting, make sure you’re available and on time. 

However, regardless of the method you choose, provide clear and detailed instructions. A well-crafted house guidebook can also be super useful in answering FAQs and providing helpful tips about the area. 

6. Aim for Great Reviews

Reviews are the lifeblood of your Airbnb business. And the key to getting a great one is to exceed guest expectations. Make sure your property is sparkling clean. Provide all the amenities you promised (and maybe a few extras). 

Be responsive to guest needs during their stay, and don’t be afraid to ask for reviews after. A simple, polite request will get you reviews fast.

Your 9-Step Airbnb Hosting Checklist – Dubai

Looking to start your Airbnb hosting journey in Dubai? Here’s your essential checklist if you’re going solo:

1. Calculate and set aside your holiday homes startup costs.
2. Get your DTCM permits, licenses, and appropriate insurance coverage sorted – this is mandatory in Dubai.
3. Transform your space with essential furnishings, working WiFi, and smart home features.
4. Set up your digital infrastructure: payment systems, smart locks, noise/smoking detectors, and security cameras.
5. Install safety essentials: fire extinguishers, first aid kits, emergency contact lists, and evacuation plans.
6. Capture professional photos and create an engaging listing that highlights your property’s unique features and location benefits.
7. Create your guest communication package: house manual, house rules, check-in instructions, and response templates.
8. Set up your property management software and dynamic pricing tools.
9. Set up your performance tracking system to monitor reviews, occupancy rates, and revenue metrics.

P.S: This checklist only covers the basics. There are “substeps” within each step, and we advise you do further research on each of them.

Frequently Asked Questions

1. Should You Manage Your Airbnb Yourself in 2025?

Yes, if you’ve got the time and dedication. While many hosts successfully self-manage their Airbnbs, a good property management company can help if you’re busy or you live elsewhere. 

2. How Much Do Airbnb Property Management Firms Charge?

Property management firms charge a percentage of your booking revenue, usually between 10% and 30%.  The exact fee can vary depending on the services provided, the location of your property, and the company itself. Some managers may also charge additional fees for items like onboarding, maintenance, or marketing.

At Homevy, the management fee is just 14% with no hidden costs. 

3. Should I Offer Discounts on my Airbnb Price?

Discounts can help you attract bookings, especially during off-season or to fill last-minute vacancies. But don’t undervalue your property. Let there be a balance. Instead of just slashing prices, offer better value like a free welcome basket, a discount on a local attraction, or a complimentary late checkout. 

4. Do You Need a Permit to Host on Airbnb?

In many locations, yes, you will need a permit or license to operate a short-term rental. In Dubai, you need a permit from the Department of Tourism and Commerce Marketing (DTCM) to host an Airbnb. Even when subletting, there are you have to obey the same regulations. Specific requirements for operating an Airbnb business varies by country, so check with your local government to know what’s required.

5. What Taxes Do You Pay on Airbnb Income?

Airbnb income is considered taxable income. You’ll need to report earnings on your tax return and pay ‘applicable’ federal, state, and local taxes. In addition, many cities require hosts to collect and remit occupancy taxes, similar to hotel taxes. This is often a percentage of the booking revenue. If you need help, blink twice consult a tax professional familiar with YOUR area’s short-term rental regulations.

Airbnb Is Still a Worthy Investment: Let Homevy Guide You

Truth is…Airbnb is more complex than it used to be.

However, despite market evolution and increased competition, Dubai’s Airbnb market continues to offer GREAT returns for our property owners. The key to success lies in professional management, local market expertise — or both :))

Homevy can be your strategic partner, transforming your property into a “hands-free” income stream. From securing permits to optimizing daily operations, our team handles every aspect of your Airbnb business.

Habibi and Habibti, contact Homevy today and let us bring you that ROI.