Starting your own business, especially a hotel business, and that too in the Dubai city, could seem daunting.
The very reasons for this include understanding the infrastructure, understanding the compliance, and adjusting to the culture.
But since you’ve already decided to start a hotel business in Dubai, you need a proper understanding of the process involved and how you could pull it off successfully.
That’s what this guide is all about.
Let’s get started.
Introduction
Dubai is the economic honeypot that every entrepreneur somehow is looking towards.
The city is brimming with opportunities and is extremely welcoming to new businesses as well.
But why only Dubai?
- Global Events: Dubai has created a reputation as a premier destination for international events and continues to soar. Every few months, businessmen and entrepreneurs from all over the world join gatherings and visit the city for work and vacation.
- Talented Workforce: Dubai’s diverse and skilled workforce is a boon for businesses. Whether you need managerial expertise or frontline staff, Dubai offers a pool of talent to meet your requirements, ensuring operational efficiency and service excellence.
- Thriving Tourism: Tourism is a major attraction for businesses, especially for the hotel sector. With thousands of travellers flocking to Dubai daily, the demand for accommodation is ever-present. Whether it’s budget-friendly lodgings or luxury retreats, the city caters to a diverse range of travellers, presenting ample opportunities for hoteliers.
- Ease of Setup: Setting up a hotel in Dubai is surprisingly straightforward. The process may be slightly long, yet it’s extremely transparent and simplified. With clear guidelines and efficient procedures, entrepreneurs can navigate the setup process with ease, minimizing bureaucratic hurdles.
Requirements for Opening a Hotel in Dubai
Now before you pull the trigger on opening a hotel in Dubai, there are a few pre-requisites that you need to take into account.
1. Obtaining a Hotel License: Securing a hotel license from the Department of Tourism and Commerce Marketing (DTCM) is the first step.
This includes providing a bank guarantee, ensuring data security for guests, transparent pricing, and maintaining a certificate of good conduct for hotel management.
2. Choosing the Right Location: Selecting the perfect location sets the foundation for your hotel’s success.
Whether you opt for the bustling Dubai mainland or the strategic advantages of a free zone, thorough research is essential to pinpointing the ideal spot for your establishment.
3. Selecting the Hotel Type: From luxury resorts to youth hostels, Dubai offers a spectrum of hotel categories to cater to a diverse clientele.
Identify your target market and choose a hotel type that aligns with your business model and aspirations.
4. Building Compliance: Ensure your hotel meets architectural specifications mandated by Dubai’s regulatory authorities.
From kitchen size and ventilation systems to fire safety measures, adherence to building codes is non-negotiable.
5. Financial Considerations: Acquiring a tourist license, a prerequisite for operating a hotel in Dubai, entails financial commitments.
Budget for license fees, service charges, and local agent fees, which typically range from AED 35,000 to AED 45,000.
Procedure to Start a Hotel Business in Dubai
In 2022, there were over 610 registered hotels in the city of Dubai.
With the amount of growth and the number of opportunities that Dubai poses, it’s almost impossible to not get excited about the idea of starting a hotel business in the city.
But then again, there’s a dedicated procedure for something like this.
Choosing the Perfect Location
The first step towards establishing your hotel empire is selecting the right location.
Dubai offers a myriad of options – the free zone and the mainland. It’s important to understand the pros and cons of each of these locations before you make a decision.
Seeking guidance from seasoned business advisors can prove invaluable in this endeavour.
Selecting and Hiring a Competent Manager
A competent manager is the backbone of every successful hotel venture.
Make sure that the individual you appoint possesses the requisite qualifications and certifications.
This is an important step.
This is because your manager will oversee all aspects of hotel operations, including staff management, sanitation, and service quality. And you don’t want any compromises with that.
Securing Initial Compliance
Before diving headfirst into your hotel venture, it’s essential to obtain preliminary approval from the Department of Economic Development (DED). Here’s a checklist of documents you’ll need:
– Completed application form signed by all partners.
– Passport copies of partners and staff.
– Plot maps, blueprints, and building completion certificate.
– Classification card for hotel development.
– Manager’s passport copy, along with experience letters and educational credentials.
– “Certificate of Conduct” from the Department of Tourism and Commerce Marketing (DTCM).
Additionally, permission from Dubai General Police Headquarters is imperative to kickstart your hotel journey.
Acquiring Your Hotel License
As mentioned earlier, a tourism license is a prerequisite for starting a hotel business in Dubai. Here’s what you need to do to obtain this license:
– Present initial approval fee receipt.
– Submit trade name certificate and associated payment receipts.
– Obtain a No Objection Certificate for international hotel groups or chains.
– Register on the Ejari portal to secure your tenancy contract and Ejari number.
– Procure a tenancy contract authorized by the landlord for a minimum of ninety days.
– Obtain necessary permissions from Dubai Municipality (DM) and other legal authorities for sanitation, waste management, and public health.
(The Right Way to) Start Your Hotel Business in Dubai
Being a business owner, you want to focus on building your business and making it successful.
But no business ever sees the light of day until it doesn’t adhere to the pillars of regulation, well-managed finances, tax compliance, and a well-built backbone of accounts.
And we at AB Capital do all of that for you.
If you want to handle the business, let us handle the backend.
Book a free consultation call with us and let us help you successfully open a business bank account in the UAE.
