How You Can Start a Hotel Business in Dubai 2019

by Zaara 07, Oct 2019

Dubai’s diverse and vibrant hospitality sector is forecast to experience robust, sustained growth over the coming years. The Dubai’s Department of Tourism and Commerce Marketing, Dubai Tourism, recently conducted a study of the market of the Emirate’s room supply and revealed that it’s set to reach 132,000 by the end of 2019, growing two-year CAGR of 11.1 per cent.

Dubai is currently the most attractive cities for tourism around the world. It is also one of the biggest business hubs. The hospitality sector, more importantly, has been re-defined through creativity and innovation, and now presents diverse investment possibilities for both local and foreign companies wishing to establish themselves in the region. Naturally, the hotel business setup in Dubai is the most talked by investors. There is a lot of demand for small and medium-sized hotels in the city as most of the tourists prefer to lodge in a comparatively cheaper hotel for a more extended stay. The government backs the sector by providing incentives to startups.

Before we discuss the procedures and requirements of setting up a hotel business in Dubai, let us talk about the classification under this business. They are-

  • Resorts
  • Hotels
  • Hotel Apartments
  • Youth Hotels
  • Guest Houses
  • Holiday Houses

It is further classified from 1 to 7 stars. While the holiday houses are divided into standard and deluxe.

There are also a few regulations for the hotels as advised by the Department of Tourism and Commerce Marketing (DTCM). They are-

  • To start a hotel business, you need a trade license. for this purpose, the applicant has to submit the bank guarantee
  • The minimum size of any hotel room is 30 sq mt
  • It is mandatory to clearly and correctly displays prices of all the duties
  • Appointing a manager with proper qualifications is also required
  • Store and secure guests data through an efficient program

Procedure to Start a Hotel Business in Dubai

The process to set up a business in the hospitality sector is simple and straight-forward. There are two steps involved wherein the first step includes getting an initial approval, and the next step involves applying for a license. To get initial approval, you shall submit the documents as under-

  • Certificate of Good Conduct from DTCM
  • ID’s and passport copies of the applicant along with all the required documents of managers, shareholders, and the directors
  • Certificate of Approval from Dubai Police
  • Details about the location and structure of the hotel

Once you submit the documents, the department will make the decision after reviewing it. After this, to obtain the license, you shall submit the following documents.

  • No Objection Certificate from the relevant authorities
  • Minimum of three months of tenancy contract with the landlord
  • Ejari Certificate
  • Approval from Dubai Municipality and other related authorities for electricity, public health, and other issues
  • Certificate of Trade Name
  • Completion of Initial Approval and its fee receipt

Once the application is verified, the applicant can collect the license from DTCM.

Reasons to Establish a Hotel Business in Dubai

Starting a business in Dubai Hotel Industry will be a sure shot way to crack into this multi-billion dollar sector in the UAE. If you think otherwise, here are the reasons that will help you in making a definite decision.

1.Everyone Needs a Place to Stay

Every person flying to Dubai every day, every person belongs to the different income group and therefore, will require a boarding that fits their income bracket. Hotels and furnished apartments in Dubai or any other Emirates can be built to target different types of clientele according to the budget and business model of the investor.

2.Forthcoming Global Events

Dubai Expo 2020 is happening in less than 500 days, and the country is getting ready for the biggest incoming crowd it has ever seen. Along with this, Dubai is now the key location for all the meetings, conferences, and events for international organizations around the world. This is the best time for investors to put their money in this sector.

3.Positive Predictions and Market Stability

A consistent surge in inbound tourism and global investment means Dubai’s hospitality sector continues to enjoy sustained and reinforced growth. A strong market and economic stability through home-grown investments will provide more opportunities for hospitality investments to come up organically.

Starting a hotel business can be difficult if you are new to the country. The laws and guidelines can be confusing, and hence you can take help from an advisor. We at Commitbiz are here to help you. Contact us today- we’d be glad to help you.