Full Video: Airbnb, Silkhaus and the Middle East’s Short-Term Rental Surge
The Middle East is experiencing a dramatic surge in short-term rentals, transforming the region’s hospitality landscape and presenting both opportunities and challenges for established players and emerging startups alike. This growth isn’t a fleeting trend but a strategic imperative, acting as a crucial pillar for the region’s ambitious tourism objectives. As Middle Eastern nations aggressively pursue mega-events and set increasingly ambitious visitor targets, companies like Silkhaus and Airbnb are positioning themselves to capitalize on the demand, emphasizing flexibility, personalization, and strategic partnerships as cornerstones of their competitive strategies. At Skift Global Forum East on October 30, 2025, in Abu Dhabi, Silkhaus CEO Aahan Bhojani and Airbnb’s Amani El Sehrawey O’Neil explored how short-term rentals are effectively addressing the escalating tourism demand.
The rise of short-term rentals in the Middle East is intrinsically linked to the region’s concerted efforts to diversify its economies away from traditional reliance on oil. Tourism has been identified as a key sector for driving economic growth, attracting foreign investment, and creating employment opportunities. Ambitious projects like Saudi Arabia’s Vision 2030, the UAE’s Tourism Strategy 2030, and Qatar’s National Tourism Sector Strategy 2030 all highlight the importance of tourism in national development plans. These initiatives involve massive investments in infrastructure, including new airports, hotels, and entertainment venues, designed to attract a growing influx of international visitors.
However, traditional hotel infrastructure often struggles to keep pace with the fluctuating demands of mega-events and evolving traveler preferences. This is where short-term rentals step in, offering a flexible and scalable solution to accommodate surges in demand during peak seasons. They also cater to a broader range of travelers, including families, groups, and those seeking longer stays, who may find traditional hotels less appealing or cost-effective. The flexibility to offer apartments, villas, and unique properties in diverse locations provides travelers with more personalized and authentic experiences, aligning with the growing demand for experiential travel.
The ascent of Airbnb and the emergence of regional players like Silkhaus signify a significant shift in the Middle Eastern hospitality market. While Airbnb has a well-established global presence, Silkhaus, with its focus on the Middle East and Southeast Asia, is strategically positioned to understand and cater to the specific needs and preferences of travelers in these regions. The company’s localized approach, including culturally sensitive offerings and partnerships with local businesses, provides a competitive edge in a market where cultural nuances are paramount.
According to a recent report by Market Insights Arabia, the short-term rental market in the Middle East is projected to reach $12.5 billion by 2030, representing an annual growth rate of approximately 18% over the next five years. This exponential growth is fueled by several factors, including the increasing popularity of online travel platforms, the rising disposable incomes of middle-class travelers, and the region’s growing appeal as a destination for both leisure and business travel. Another key statistic reveals that an estimated 45% of travelers to the Middle East now consider short-term rentals as a viable alternative to traditional hotels, highlighting the growing acceptance and preference for this accommodation option. Furthermore, data from the World Tourism Organization indicates that the Middle East experienced a 62% increase in international tourist arrivals in the first quarter of 2024 compared to the same period in 2023, demonstrating the region’s strong tourism recovery and growth trajectory.
The success of short-term rentals in the Middle East is also dependent on navigating a complex regulatory landscape. Different countries and cities within the region have varying regulations governing short-term rentals, ranging from outright bans to licensing requirements and taxation policies. Airbnb and Silkhaus are actively engaging with governments and local authorities to promote responsible hosting practices and advocate for clear and consistent regulations that foster a level playing field.
"The key to sustainable growth in the short-term rental market lies in collaboration and compliance," says Dr. Fatima Al-Mansoori, a Senior Market Analyst specializing in Middle Eastern tourism. "Platforms like Airbnb and Silkhaus need to work closely with governments to develop regulatory frameworks that balance the interests of hosts, guests, and local communities. This includes addressing concerns related to safety, security, and the impact on housing affordability."
The rise of short-term rentals also presents challenges for traditional hotels. To remain competitive, hotels are increasingly focusing on enhancing the guest experience, offering personalized services, and leveraging technology to improve efficiency. Many hotels are also exploring partnerships with short-term rental platforms to offer a wider range of accommodation options to their customers.
Looking ahead, the short-term rental market in the Middle East is poised for continued growth and innovation. We can expect to see further consolidation in the market, with larger players acquiring smaller companies to expand their reach and offerings. Technology will continue to play a crucial role in shaping the future of short-term rentals, with advancements in areas such as artificial intelligence, data analytics, and virtual reality enhancing the guest experience and streamlining operations.
The integration of smart home technology, for example, will allow guests to control various aspects of their accommodation, such as lighting, temperature, and entertainment systems, through their smartphones or voice assistants. Data analytics will enable platforms to personalize recommendations, optimize pricing strategies, and identify emerging trends in traveler behavior. Virtual reality could be used to offer virtual tours of properties, allowing potential guests to experience the accommodation before booking.
The environmental impact of tourism is also a growing concern, and short-term rental platforms are increasingly focusing on promoting sustainable tourism practices. This includes encouraging hosts to adopt eco-friendly practices, such as using renewable energy, reducing waste, and conserving water. Platforms are also partnering with local communities to support sustainable tourism initiatives and promote responsible travel behavior.
"The future of tourism is inextricably linked to sustainability," states Professor Omar Khalil, a Professor of Public Policy at the University of Dubai. "Short-term rental platforms have a responsibility to promote responsible tourism practices and minimize their environmental footprint. This includes investing in sustainable infrastructure, supporting local communities, and educating travelers about the importance of respecting the environment."
The increasing demand for short-term rentals is also impacting the long-term housing market in some areas. Concerns have been raised about the potential for short-term rentals to reduce the availability of affordable housing for local residents, particularly in popular tourist destinations. Governments are grappling with this issue, exploring various policy options to mitigate the negative impacts of short-term rentals on housing affordability. These options include implementing zoning regulations, limiting the number of days a property can be rented out short-term, and imposing taxes on short-term rental income.
The surge in short-term rentals in the Middle East reflects a broader global trend, with similar growth patterns observed in other regions around the world. The rise of the sharing economy and the increasing popularity of online travel platforms have disrupted traditional hospitality models, empowering travelers with more choices and driving competition in the market. As the Middle East continues to invest in its tourism infrastructure and attract a growing influx of international visitors, short-term rentals will play an increasingly important role in shaping the region’s hospitality landscape. The ability of players like Airbnb and Silkhaus to adapt to evolving market dynamics, navigate regulatory challenges, and embrace sustainable practices will be crucial to their long-term success in this dynamic and competitive environment. The Skift Global Forum East served as a crucial platform to discuss these evolving dynamics and chart a course for the future of short-term rentals in the Middle East and beyond. The discussions highlighted the necessity for collaboration, innovation, and a commitment to responsible tourism practices to ensure the sustainable growth of the sector.
