It is a known fact that Dubai, in the past few decades, has emerged as the most preferred travel destination in the whole world. Furthermore, it is the best place in the UAE to invest because of its abundant resources, healthy business and stability in the political system. Business setup in Dubai has been popular among investors due to the various incentives offered by the government for startups. One of the most lucrative businesses to start in Dubai is the hotel business, which is popular due to tourism - a lot of people visit Dubai every year with their friends and families. A variety of futuristic projects and landscapes are the reason for corporate giants to invest in this sector. As per the reports, in early 2017, the hotel business saw a supply growth of 5.6% in the hospitality sector.
A foreign investor wishing to invest in the hotel business must comply with the regulations related to the classification of hospitality establishment, categorized under:
- Hotel Apartments
- Youth Hostels
- Guest House
- Holiday House
Hotels are further categorized from 1-star to 7-star, and holiday houses are divided into standard or deluxe establishments. Starting a business in Dubai can be made hassle-free if you follow the requirements listed by the authorities. If you want to start a hotel business in Dubai, here are a few things you should know.
1. Hotel Regulations
Before setting up a hotel business, you are required to follow the regulations outlined by the Department of Tourism and Commerce Marketing (DTCM), which are as follows:
- A bank guarantee is required from the investors/owners of the company before a tourism license can be issued
- The minimum size of any hotel room may not be less than 30 square meters
- Provision of an effective program to securely store a guest’s data
- All packages and prices must be correctly displayed
2. Legal Requirements
Dubai has a few judicial requirements which are more or less similar for all type of businesses. But there are some variances when it comes to the hotel business. For instance, while most businesses need a trade license for starting a business in Dubai, to start a hotel business, you need to have a tourism license. Thus, check these minute details before making a decision, and do not simply follow the usual procedure.
3. Appoint a Manager
Any business requires a manager who handles all the necessities in the company. Similarly, a hotel business also requires a manager with relevant qualifications and approved certification. Appointing a manager at the inception is important because he/she can be of aid while getting the initial approval and gathering all the documents needed for the same.
4. Initial Approval
After you have appointed a manager, the next ideal thing to do is getting the initial approval from the concerned department. To do so, you require:
- An application form from the Department of Economic Development (DED)
- Passport copy and IDs of the applicant/owner/investors
- Location blueprints, plot maps and building completion certificate for the hotel property
- Classification card for the hotel business
- Passport copy of the manager along with educational certification and experience letters
- DTCM approved the certificate of good conduct
- Approval from the Dubai General Police Headquarters
5. Get the License
As mentioned earlier, you need to get a tourism license to start a hotel business in Dubai. The following documents should be submitted to get an approval from the authorities:
- Fee receipt of the initial approval
- Trade name certification and related payment receipts
- No-Objection Certificate (NOC) in case of an international group or brand of hotels
- Minimum 3 months of tenancy contract approved by the landlord
- Ejari certification for the hotel property
- Documents required for the initial approval and pertinent certifications
- Consent from the Dubai Municipality and related judicial bodies for sanitation, waste management, public health, etc.
After submitting all the documents, the DTCM will go through each and every document, and if they do not find any loophole, your license will be approved within a week. The DTCM offers e-service through which you can print the license, or you can go to their office and get it in-hand from the counter. To make things even easier, you can also appoint a business consultant who can do the needful for you. We at Commitbiz have our team of experts to help you in your company formation, registration, and counseling. If you are planning to start a hotel business in Dubai, do contact us, even if it’s just for a friendly advice.