Five Things To Consider Before Starting a Hotel Business in Dubai

by Zaara 20, Jul 2021

Five Things To Consider Before Starting a Hotel Business in Dubai

UAE is the preferred choice of investors due to its abundance in resources and continuous business growth. Dubai is world-famous for its attractive buildings and tremendous opportunities to attract tourists. Dubai is considered as one of the best tourist places across the globe. The increasing number of tourists every year brings more business investors to Dubai.

Due to an increase in visitors' percentage every year investment in setting up of hotel business seems to be a lucrative choice for the investors. Previous year hotels of Dubai recorded 230 percent profit per rooms that is highly commendable. Dubai's hotel industry will prosper by leaps and bounds up to EXPO 2020 as more than fifty thousand rooms are expected to be built in Dubai. So if you are planning to invest in Dubai, then you can proceed ahead with the Establishment of the hotel business in Dubai.

Now, before setting up a business in Dubai, regarding the hotel industry, certain essentials are to be known before. This guide will help you to understand the business basics that will help you during your hotel establishment process. Let’s proceed ahead.

Things To Consider Before Starting a Hotel Business In Dubai:

Hotel Business will give you an opportunity of becoming one of the recognised businessmen of the world.As the Dubai Expo 2020 is coming, which will boost the hotel sector, as millions of foreigners are going to visit Dubai. Below are certain key ingredients that state the necessary things to be considered before starting a hotel business in Dubai.   

  1. In Debt Market analysis

 Competitors market analysis plays a vital role in the business establishment as through the market analysis you came to know about the idea and innovation of the competition. In this competing world in debt knowledge of the sector in which you are planning to set up a business is necessary. Through market analysis only you can come up with new ideas and innovation which is yet to be implemented. There is no chance of copyright compliance by competitors if you have analysed the market well. To sustain in this competitive world, unique and rare concepts which are new for the world should be adopted, which is only possible in debt market analysis.

  2. Selection of Appropriate Location

The deciding factor for booming or busting of the hotel is the location in which it is built. Before you freeze any location for your hotel set up, make sure that you have done all the necessary research and surveys. The sustainability of your hotel depends upon its location.

Things considered before freezing location;

  • Visibility- The hotel should be easily visible to the public and should be in a high footfall area. Make sure that the signboard of your hotel is also visible.
  • Accessibility- The customers like to revisit the hotels that are easily accessible to them and thus increasing the footfall in the hotel.
  • Affordability- The prices should be affordable to all types of customers, and therefore more customers will opt for hotels of cheaper rates than of high rates.

Dubai provides various zones for the establishment of hotel sectors as it has various free zones, mainland as well as offshore areas to carry the hotel establishment process.

Freezone/Offshore/Mainland

 Free Zone- Setting up hotel business in the Free zone is a low-cost option, and there is a strict rule that your hotel must be presented physically on that Free Zone. Dubai provides various Free Zones to set up a hotel business which is beneficial as they give 100% profit, tax redemption and ownership.

Mainland- Setting up of business in Dubai mainland is quite a lengthy task as it requires a legal and administrative procedure to be full-filled. According to the commercial laws of UAE Foreign owners can only hold up to 49% of the business, if set up is in mainland 51% of the shares are held by local sponsors.

Offshore- Whereas Setting up of business in Offshore is quite easy as compared to mainland and Dubai provides Jebel Ali Free Zone Authority[JAFZA] for making the establishment in offshore easy and smooth. Setting up of business in JAFZA is beneficial as it provides 100% foreign ownership and also it does not require a certain minimum capital for establishment.

3. Adoption Of Innovative Concepts

Increasing tourists increases the demand for hotels but how should your hotel be different from the rest?,should be your concern. As discussed in the above point, uniqueness from the competitors will make you an innovator. The pleasing and attractive ambience attracts and holds more customers. The blending of different types of food together and making a tasty and varied styled menu will also be beneficial. The welcoming of guests in an innovative way will also set your benchmark high in the competing market.

4. Expenses To Be Carried Out

Before planning to start a hotel business, jot down the necessary expenses to avoid wastage of money and time. Planning is essential because the opening of the hotel requires enormous investment.

For every future restaurant owner, to stop his money go in vain, he/she has to be aware of necessary expenditure beforehand. Some of the expenses that should be known beforehand are;

· License

· Cost of the setting of the hotel- equipment, table, chair etc.

· Expenses for buying a new property or rent

· Initial investments

· Working Capital

5. Variety of License

In Dubai you require mainly two types of licenses to open a restaurant:

Trade License

Dubai's Department of Tourism and Commerce Marketing is responsible for providing trade licenses for the kind of restaurant you are opening. The type of restaurant should be clearly mentioned in the license.

Food License

After the trade license is provided to you, you have to apply for a food license to the Food Safety Department. The Food Safety Department is responsible for providing a food license for you.

Why Commitbiz?

The businessman does not have to worry about the establishment of his hotel setup, Commitbiz is there to help them out by providing them with all the services that are essential for the hotel business set up.

Investors have to only go through the above points and when they have made up their mind for hotel establishment, they can choose a business consultant like Commitbiz who is working to its fullest potential to help them set up any business in UAE. Feel free to Contact Us; we will be glad to assist you.