Dubai is becoming a breeding ground for businesses as businesses men and entrepreneurs from all over the world are coming into the UAE to set up their businesses. This has been possible due to the world-class infrastructure and the increasing conduciveness of the business environment in the UAE.
It has urbanized itself as one of the world’s famous travel and tourism destinations. The hospitality industry has a major part to play and now has been redefined through innovation and creativity. The hotel industry in the region is also booming as there are a huge number of footfalls into the country for setting up a business or for travel purposes. It presents numerous investment opportunities for both local and foreign companies wishing to establish themselves in the region.
With this article, we bring you all the information you need to know about setting a hotel business in Dubai for the year 2021.
Classification of Hotels in Dubai
Before we dig deeper, let us first understand the basics. The hotels in Dubai are divided into various different segments and the management can choose as per their requirement. If you want to start a hotel business in Dubai, it should be under one of the following categories:
- Hotel Apartments
- Youth Hostels
- Guest Houses
- Holiday Houses
There is a rating system that is followed and a hotel is classified from 1 to 7 stars, while holiday houses are divided into standard or deluxe.
Hotel Regulations in Dubai
In order to obtain a license for your hotel business, there are a number of rules and regulations formed by the Department of Tourism and Commerce Marketing (DTCM) Dubai. Following these regulations can help a hotel business to flourish and provide greater revenue. Some of these regulations include:
- A bank guarantee is required before the 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 guest’s data
- All packages and prices must be correctly displayed
- The owner or the manager must have a ‘Certificate of Good Conduct
Benefits of Starting a Hotel Business in Dubai
Hotel businesses have huge benefits as the government is focusing more on the tourism and hospitality sector in the UAE. With many different features, the benefits of starting a hotel business in the UAE are innumerable. Here are a few benefits of setting a hotel company in Dubai.
1. Global Events
Dubai Expo 2020 is said to have 25 million outside visitors which is a once in a lifetime opportunity to make this business profitable than it already is. Apart from this, Dubai is also a key location for all the meetings, conferences, project presentations, and events for international organizations around the world.
The Dubai Expo 2020 was delayed due to the outbreak of the Covid -19 pandemic but as the situation are clearing, the Expo is underway.
2. Talented Staff
Dubai being a multicultural city is also a treasure chest for talented manpower. The investor will be able to find all the personnel right from the senior managers to service and floor staff easily with a profile that fits his business model and target crowd. This is one of the best features of setting up a business in the UAE.
3. Everyone Needs a Place to Stay
There are thousands of visitors flying in and out of Dubai every day with every person belonging to a different income class. They will, therefore require a boarding that fits their income bracket. Hotels, Motels, or Small Houses can be built to target such types of clientele. There have been indications that the number of visitors will be increasing in the coming years and to satisfy the demand more hotels are being built which provide an excellent opportunity to the entrepreneurs who want to enter into this sector.
4. Easy Set-Up Process
The process to set up a hotel business is simple and straightforward with fewer hassles. Investors can follow the rules and regulations to get their job done without any knots in the process. Department of Economic Development (DED) is the primary authority that handles the set-up process.
How to Open a Hotel Business in Dubai
The first thing you need to know is, unlike other businesses in Dubai which require you to have a trade license, a hotel business formation shall have a tourism license. Other than that, for the most part, the procedure is the same as any other business in Dubai.
The next thing is, deciding where do you want to set up a business- Mainland or Free zone. Both these places have different rules and different benefits thus the management needs to understand and analyse all the benefits available to the business.
Let us now understand the procedure to be followed to register your hotel business.
1. Appoint a Manager
You need to appoint a manager for your hotel business with relevant qualifications and approved certification through which he/she can be given a position. The manager plays an important role in terms of ascertaining the requirements of the hotel as well as aiding through the process of initial approval and licensing. The manager will also be responsible for the management of the employees and the hiring of new ones.
2. Get the Initial Approval
Initial approval must be taken from the Department of Economic Development (DED). It includes sending them the following documents attached with the application form.
- Filled application form from the DED
- ID and Passport copies of the applicants
- Blueprint, plot map, location, and building completion certificate for the hotel property
- Classification card for the hotel business
- Managers passport copy and educational qualification with experience letter (if any)
- Certificate of Good Conduct approval from DTCM
- Approval from Dubai general police headquarters
Once you submit this form and documents, DED will go through it and make a definite decision in a week. After receiving the approval the business can apply for the license.
3. Obtain the License
The hotel business in Dubai requires you to have a tourism license. Here are the documents required to obtain a Tourism License:
- Fee receipt of initial approval
- Trade name certificate and related payment receipts
- NOC in case of international group or brand of hotel
- Ejari Certification for the property
- Initial approval documents and pertinent certification
- Consent from Dubai Municipality and related judicial bodies for sanitation, waste management, public health etc
- Minimum three months of tenancy contract approved by the landlord
After submitting all the documents, DTCM will go through every document and if there are no glitches then you will get your tourism license in a week or two. If due to any reason the person or entity cannot go to the office to collect the license, then the DTCM also offers e-services through which you can print your hotel license.
This information is enough for you to start a hotel business in Dubai. The procedure may seem complex and confusing at times, therefore, it is always a good idea to hire a consulting agent to handle all the procedure for you.
If you are still clueless about where to start, we at Commitbiz are here to help you. Our professional consultants will understand the requirements of the business and will provide the necessary advice. For more details feel free to Contact us today and we will help you plan your business in a better and profitable manner.
Is Hotel Business Profitable in Dubai?
Yes, the hotel business is very profitable in Dubai and in the coming years, the profitability will increase due to the increasing footfalls into the country.
How can I open a hotel in Dubai?
Opening a hotel business is a three-step process:
- Appoint a manager
- Obtain Approvals
- Get the license