Profitability: Airbnb vs. Long-Term Rentals in Bahrain

Published on May 3, 2026 and written by Cyril Jarnias

Short-Term vs Long-Term Rentals in Bahrain: Which Option is More Profitable?

In an ever-evolving economic landscape, property owners face a delicate dilemma: embrace the growing trend of short-term rentals through Airbnb or prioritize the stability of long-term leasing.

In Bahrain, this decision is particularly influenced by various factors such as:

• Real estate market fluctuations
• Tourism
• Local regulations

This article aims to analyze the comparative profitability of these two options, city by city, to provide an informed perspective for investors and owners seeking to optimize their real estate investment in this dynamic Gulf country.

Airbnb Comparison: Profitability by City in Bahrain

Airbnb Profitability Comparison by City in Bahrain (2025)

City/Neighborhood	Average Monthly Airbnb Revenue	Airbnb Occupancy Rate	Average Daily Rate (ADR)	Estimated Long-Term Rental Revenue*	Local Regulations
Amwaj Islands (Muharraq)	$1,134.31	27.19%	$231.29	$700–$900	Low
Muharraq	$493.71	23.07%	$120.85	$600–$800	Low
Manama	Unquantified data here	approx. 25–30%*	approx. $100–$180*	$750–$1,000	Variable
Riffa	Unavailable data	—	—	approx. $500–$700	–

*Estimate based on local market for a furnished one-bedroom apartment in annual lease.

Detailed Analysis of Potential Income

• Airbnb in premium areas like Amwaj Islands (Muharraq):
  • A high-performing host can achieve over $12,000/year for a single property if well-managed and optimized.
  • Top managers in Amwaj Islands report gross annual revenues exceeding $50,000, with multi-property portfolios surpassing several hundred thousand dollars per year.
  • Occupancy rate remains low (~27%), but compensated by high ADR (>$200/night).
• Long-term rentals
  • Rents remain stable and guarantee nearly full occupancy year-round.
  • Gross profitability is often lower than possible with Airbnb in case of excellent seasonal and tourist management.

Factors Influencing Profitability

• Tourist seasonality
  • High seasons: mild winter, international events, or regional school holidays → occupancy rate increases up to +40%.
  • Low summer season: marked drop in occupancy rate and need to reduce rates to attract travelers.
• Average occupancy rate
  • Generally between 23% and 30%, varying by location, property standard, and local tourist appeal.
• Associated management costs

• Recurrent cleaning fees after each stay (Airbnb)
• Platform commission (~3%)
• More intensive rental management (frequent check-ins/outs, guest communication)
• Regular furniture & equipment required
• Recommended specific short-term insurance

VS

• For long-term rental: reduced fixed costs after initial setup
• Less turnover therefore fewer additional expenses
• Regular maintenance but more predictable schedule

Local Regulations Impacting Yield

The regulatory framework remains relatively flexible in governorates like Muharraq/Amwaj Islands with few to no major restrictions identified for Airbnb activity currently.

However, it is always advisable to:

• Register your activity with local authorities if required
• Check for any potential changes in legislation regarding short-term rentals at municipal or national level

Recent Statistics & Bahrain Airbnb Market Trends

In 2025,

• Continued growth observed in premium segments like Amwaj Islands (+15% active properties/year)
• Stable average revenues despite slight general decrease in occupancy rate (-2 points vs previous year)
• Secondary markets like Riffa struggle to take off due to lack of marked tourist appeal

Concrete Examples of Potential Financial Gains

List illustrating two typical scenarios:

• Owner investing in Amwaj Islands:
  • Standard annual rental = ~$850/month i.e. ~$10,200/year net without special effort
  • Optimized operation via Airbnb = up to ~$1,130/month x12 = ~$13,560/year gross before expenses; Top performer >$50k
  • Estimated logistical additional cost: extra maintenance/cleaning ≈$150/month + time dedicated to client management
• Owner in downtown Manama:
  • Stable classic rental around ~$9,000-$12,000/year depending on size/standard
  • Higher potential via short-term rentals only with effective marketing positioning + high standard

The higher profitability displayed by certain tourist neighborhoods nevertheless comes with increased seasonal volatility as well as a high level of operational requirements.

Seasonal Rental Yield vs Long-Term Rental

Comparison of Average Financial Yield Between Seasonal and Long-Term Rentals in Bahrain

City/Area	Seasonal Rental Yield (Airbnb)	Long-Term Rental Yield	Typical Occupancy Rate
Bahrain Bay	7–9% gross/year	4–6% gross/year	65–75% (seasonal)
Amwaj Islands	8–10% gross/year	5–6.5% gross/year	70–80% (seasonal)
Juffair	7–8% gross/year	4–5.5% gross/year	60–70% (seasonal)
Classic Residential Neighborhoods	4–6% gross/year	3.5–5% gross/year	90–95% (long-term)

2024–2025 data, calculated based on average entry prices starting from $125,000 for a standard furnished apartment, excluding fees and taxes (rental income tax-exempt).

Main Factors Influencing Yields

• Tourism seasonality:
  • Attractive areas (Amwaj, Bahrain Bay) experience high short-term demand during tourist peaks and international events.
  • Occupancy rates drop off-season, impacting seasonal profitability.
• Local legislation:
  • Extension of freehold property areas and tax exemption on rental income make the market very attractive for foreign investors.
  • Limited regulation of seasonal rentals, but need to comply with condominium rules and sometimes obtain specific licenses.
• Maintenance costs:
  • Seasonal rental: higher maintenance, cleaning, management, and furnishing expenses, offset by higher nightly rates.
  • Long-term rental: routine maintenance costs, simplified management, tenant responsible for certain costs.
• Occupancy rate:
  • Seasonal rental: more variable (60–80% depending on area and season).
  • Long-term rental: more stable (90–95% in areas popular with expatriates).

Impact of Real Estate Market Fluctuations in Bahrain

• Price stability:
  • The market remains stable, with annual price increases around 1.5% for villas.
  • Rental incomes are generally stable, especially in areas with high expatriate demand.
• Effect on yields:
  • Rising acquisition prices may temporarily reduce gross yield, but property valuation compensates medium-term.
  • Long-term rents evolve more slowly; seasonal allows quicker rate adjustments according to market.

Evolution Prospects for Rental Markets in Bahrain

• Seasonal rental:
  • Growing investor attraction to premium neighborhoods and serviced residences, thanks to tourist demand and flexibility offered by Airbnb.
  • Potential for yield increases with event growth and improvement of tourist infrastructure.
• Long-term rental:
  • Demand sustained by strong expatriate population (>70% of rental market), particularly in well-connected areas suitable for GCC families.
  • Market considered safe haven during uncertainty periods, with more stable but less dynamic profitability.
• Economic context:
  • Favorable taxation, political stability and expansion of freehold areas should continue to support rental investments.
  • Outlook remains positive, with market oriented towards stability and competitive yields compared to other Gulf countries.

Key takeaway:
Seasonal rental offers higher gross yield but more volatile, dependent on seasonality and operating expenses, while long-term rental guarantees stability and high occupancy rate, particularly favored by expatriates in central and residential neighborhoods.

Analysis of Quantitative Data for Decision Support

Quantitative analyses to compare profitability of Airbnb and long-term rentals in Bahrain rely on several types of data collected from real estate platforms, local listings, and statistical reports on the rental market. Main sources include:

• Data from Airbnb: occupancy rates, average price per night, monthly gross revenues by city.
• Local real estate agencies: average long-term rents, annual vacancy rates.
• Sector reports: seasonal tourism trends in Bahrain influencing rental demand.

Key financial indicators used in the analysis are:

• Occupancy rate (%)
• Average revenue per night (BHD)
• Estimated monthly gross revenue (BHD)
• Annual return on investment (ROI %)

City	Airbnb Occupancy Rate (%)	Average Price/Night Airbnb (BHD)	Monthly Airbnb Revenue* (BHD)	Monthly Long-Term Rent (BHD)	Short-Term ROI (%)	Long-Term ROI (%)
Manama	60–75	35	1,600	650	12–14	6–7
Muharraq	50–65	28	1,100	550	~10	~6

Rental Contracts in Bahrain: Which Option to Choose?

Rental Contract Options in Bahrain

Option	Duration	Common Platforms	Legal Regulation
Short-Term Rental	Days to few months	Airbnb, Booking.com	Less regulated, registration obligations sometimes required
Long-Term Rental	1 year or more	Local agencies, direct listings	Contracts registered with concerned ministry

Advantages and Disadvantages of Different Options

Short-Term Rental (e.g., Airbnb)

Advantages:

• Great flexibility for owner and tenant
• Daily or weekly rates generally higher than long-term rentals
• Ability to adjust prices according to strong Bahraini market seasonality (international events, tourism)

Disadvantages:

• Less predictable occupancy rate (increased vacancy risk off-peak season)
• More intensive management (frequent key handovers, regular cleaning)
• Regulatory uncertainties: some municipalities may restrict tourist rentals or require specific license
• Variable tax implications: income potentially subject to income tax if authorities strengthen tourism accommodation taxation

Long-Term Rental

Advantages:

• Income stability thanks to contractual commitment over several months/years
• High occupancy rate for entire contract period
• Less daily operational management

Disadvantages:

• Less flexibility to adjust rents in case of rapid rental market increase
• Early contract termination difficult, strict conditions often imposed by local law upon early cancellation
• Lower potential profitability during periods of exploding tourist demand

Economic Comparison and Influential Local Factors

Economic factors:

• The Bahraini rental market is marked by strong seasonality, particularly in Manama and around major sporting or cultural events.
• Annual profitability can be higher with short-term if occupancy rate remains high year-round. However, this model is sensitive to seasonal fluctuations.
• During off-peak periods, a short-term rental property may remain vacant for several consecutive weeks.

Tax implications:

• Long-term rentals are often subject to simplified declarative regime. Income must be declared according to applicable tax regulations; these evolve but tend towards more transparency.
• For tourist rentals via international platforms, there is sometimes an additional obligation to register with local authorities.

Cultural and economic specificities:

Bahrain being a Muslim-majority country with pronounced family tradition: some residential neighborhoods prefer limiting turnover generated by Airbnb to preserve their tranquility.

Synthetic list of criteria influencing choice:

• Desired flexibility (owner/tenant)
• Administrative and operational capacity of lessor
• Risk appetite facing seasonal variations
• Social acceptance in certain neighborhoods/coastal cities
• Main objective: stability vs occasional yield maximization

⚠️ It is strongly recommended that owners wishing to opt for short-term rental via international platform regularly check evolution of local rules regarding tourist accommodation to avoid any legal or tax risk.

Quick Comparative Summary:

Criterion	Short-Term	Long-Term
Cost/rent	Higher/night	Lower/month
Flexibility	Maximum	Limited
Regulation	Variable	Strong
Taxation	Evolving	Stable
Management	Demanding	Simple