Dubai’s hotel market is growing fast. By 2024, revenue is expected to hit US$0.44bn and keep growing to US$0.53bn by 2029. Starting a hotel business in Dubai is a great opportunity. It is famous for luxury and tourism making it a perfect location for your hotel business setup.
Whether you want to open a boutique hotel or a large resort, this guide will help you understand how to set up a hotel business in Dubai.
Benefits of Starting a Hotel Business
If you are looking to start a hotel business, there is no better place than Dubai. Here is why:
Growing Tourism Industry
Dubai’s tourism industry is booming. Millions of visitors come to the city every year, creating a strong demand for hotels. Starting a hotel business here means tapping into a constantly growing market.
High Occupancy Rates
Despite the pandemic, Dubai’s hotels had an occupancy rate of 60% in previous years. This rate is expected to rise in the coming years, making it a promising time to start a hotel business. High occupancy rates mean better returns for your investment.
High Investment Returns
Opening a hotel business in Dubai can be very profitable. The average daily rate (ADR) for hotels was AED 468 (USD 127), and the revenue per available room (RevPAR) was AED 197 (USD 54). These figures show that opening a successful hotel business setup in Dubai can offer high returns.
Events and Attractions
Dubai hosts major events that attract millions of visitors. For example, the Future Hospitality Summit, a top hospitality investment conference, is set to have its biggest event yet in 2024. Additionally, the city welcomed over 25 million people during Expo 2020. These events provide a great opportunity for a successful hotel business setup.
Comprehensive Guide on How To Set Up Hotel Business UAE
Here is a checklist on how to set up a hotel business, the most comprehensive guide you would ever find. So don’t forget to bookmark it. let’s start:
Understanding the Hotel Industry in Dubai
Dubai’s hotel market is thriving. By 2024, UAE hotels are predicted to grow at a rate of 3.79% per year. Therefore, the demand for hotel accommodations is expected to grow, offering plenty of opportunities for new hotel businesses.
However, it’s vital to conduct thorough market research on how to set up a hotel business. This will help you understand the competition, identify market gaps, and determine the type of hotel that will best meet the needs of your target audience.
Creating a Solid Hotel Business Plan
A well-crafted hotel business plan is the backbone of your business setup.
Dubai’s hotel market is growing fast. By 2024, revenue is expected to hit US$0.44bn and keep growing to US$0.53bn by 2029. Starting a hotel business in Dubai is a great opportunity. It is famous for luxury and tourism making it a perfect location for your hotel business setup.
Whether you want to open a boutique hotel or a large resort, this guide will help you understand how to set up a hotel business in Dubai.
Benefits of Starting a Hotel Business
If you are looking to start a hotel business, there is no better place than Dubai. Here is why:
Growing Tourism Industry
Dubai’s tourism industry is booming. Millions of visitors come to the city every year, creating a strong demand for hotels. Starting a hotel business here means tapping into a constantly growing market.
High Occupancy Rates
Despite the pandemic, Dubai’s hotels had an occupancy rate of 60% in previous years. This rate is expected to rise in the coming years, making it a promising time to start a hotel business. High occupancy rates mean better returns for your investment.
High Investment Returns
Opening a hotel business in Dubai can be very profitable. The average daily rate (ADR) for hotels was AED 468 (USD 127), and the revenue per available room (RevPAR) was AED 197 (USD 54). These figures show that opening a successful hotel business setup in Dubai can offer high returns.
Events and Attractions
Dubai hosts major events that attract millions of visitors. For example, the Future Hospitality Summit, a top hospitality investment conference, is set to have its biggest event yet in 2024. Additionally, the city welcomed over 25 million people during Expo 2020. These events provide a great opportunity for a successful hotel business setup.
Comprehensive Guide on How To Set Up Hotel Business UAE
Here is a checklist on how to set up a hotel business, the most comprehensive guide you would ever find. So don’t forget to bookmark it. let’s start:
Understanding the Hotel Industry in Dubai
Dubai’s hotel market is thriving. By 2024, UAE hotels are predicted to grow at a rate of 3.79% per year. Therefore, the demand for hotel accommodations is expected to grow, offering plenty of opportunities for new hotel businesses.
However, it’s vital to conduct thorough market research on how to set up a hotel business. This will help you understand the competition, identify market gaps, and determine the type of hotel that will best meet the needs of your target audience.
Creating a Solid Hotel Business Plan
A well-crafted hotel business plan is the backbone of your business setup. It should clearly outline your vision, mission, and objectives. Here are the key components to include:
Concept and Theme: Define the unique concept and theme of your hotel. Whether it’s a luxury resort, a business hotel, or a holiday hotel, your concept should resonate with your target market.
Target Market: Identify your primary and secondary target markets.
Location: Choose a strategic location that aligns with your hotel concept.
Services and Amenities: List the services and amenities your hotel will offer.
Securing Financing for Your Hotel
Setting up a hotel business requires substantial capital investment. Here are several financing options available:
Bank Loans: Approach banks for business loans. Ensure you have a robust business plan and financial projections to present.
Dubai SME Support Programs: Dubai SME offers various programs for UAE nationals, including business scale-up support services and funding support loans.
Investors: Look for investors interested in the hospitality industry. This could include individuals, venture capitalists, or investment firms.
Personal Savings: If you have substantial personal savings, you can use them to fund part of your hotel business.
Government Support:
Future District Fund: Launched in 2020, this is a $272 million seed-to-growth fund aimed at supporting and growing startups.
Dubai Next: This crowdfunding platform helps startups and SMEs raise funds. The platform collects the funds in an escrow account to guarantee the project.
Legal Requirements and Licensing for Starting a Hotel Business in Dubai
1. Register Your Business
To get initial permission from the Department of Economic Development (DED), you must have all required documentation ready. Here’s what you need:
Requirement
Description
DED Application Form
Fill out the form, have all your partners sign it, and submit it.
Passport Copies
Provide copies of your passport, your business partners’ passports, and your staff’s passports.
Property Documents
Submit plot maps, site designs, and the building completion certificate for the hotel property.
Categorization Card
Necessary for the company formation of a hotel business.
Manager’s Documents
Provide a copy of your manager’s passport, letters of recommendation, and academic transcripts.
Certificate of Conduct
Approved by the Department of Tourism and Commerce Marketing (DTCM).
Dubai Police Approval
Obtain authorization from the Dubai Police General Headquarters.
2. Obtain Approval from DTCM
After registering your hotel company, you must get clearance from Dubai’s Department of Tourism and Commerce Marketing (DTCM).
3. Get Your Hotel License in Dubai
To start a hotel business, you need a tourism license. Here’s what you need:
Requirement
Description
Initial Approval Receipt
Present the fee receipt.
Trade Name Certificate
Submit the certificate and payment receipts.
No Objection Certificate
Required for international hotel groups or chains.
Ejari Registration
Register on the Ejari platform and get your tenancy contract and unique Ejari number.
Tenancy Contract
Approved by the landlord for a minimum of ninety days.
Dubai Municipality Consent
Acquire approval for sanitation, waste management, public health, etc.
4. Obtain a Bank Guarantee
You must provide DTCM with a bank guarantee to obtain hotel license. The amount depends on the size and type of your hotel.
5. Inspections
DTCM will inspect your hotel property to ensure it meets health, safety, fire safety, and other requirements.
6. Final Approval
If your hotel passes all inspections and complies with regulations, DTCM will grant your hotel license.
Rules and Regulations
Here are some hotel business requirements other then the above mentioned checklist. You need to fulfill:
Architectural Requirements:
Kitchen area: 300 to 380 square feet.
Proper ventilation and a chimney 2 meters higher than the nearest building.
Washable, non-absorbent, and fireproof walls, floor, and roof.
Separate basins for washing utensils, vegetables, fruits, and meat.
Storage facilities for all types of food items.
Drainage pipe at least 2 inches from the walls.
Guest Data Storage: Implement measures to safeguard guest information.
Transparent Pricing: All costs, including the 5% VAT, must be clear to avoid misunderstandings.
Manager’s Certificate: The manager must have relevant qualifications and approved certifications.
Corporate Governance: As part of DTCM’s governance, the Whistleblower Protection Policy promotes transparency, ethics, effective communication, and accountability in Dubai’s tourism industry.
Classifying Your Hotel Establishment in Dubai
As it’s the most comprehensive and up to date guide on how to set up a hotel business in dubai or UAE, we are not going to keep anything hidden. So To operate in Dubai, all hotels must apply for classification. Worried about this step? Rest assured we will walk you through this as well. Just follow the simple steps below and you are good to go.
Pre requesit Document Requirements
Initial approval from DET (Department of Economy and Tourism)
Passport copy of the license holder
A land map copy
Dubai Municipality building completion certificates
Trade name certificate
Fees
Fees vary depending on the hotel category, star rating, and total number of units.
Processing Time
Applications are processed within one business day or 24 hours.
Steps to Apply for Classification
Collect the Property Unit Details
Gather all necessary details about your property units.
Log in to the Classification Portal
Access the online classification portal.
Complete the Online Application
Submit the following documents through the online application:
Initial approval from DET
Passport copy of the license holder
A land map copy
Dubai Municipality building completion certificates
Trade name certificate
Fill in the Self-Assessment
You can complete a self-assessment to understand your hotel’s potential rating. It is optional.
Last Steps to Start a Hotel Business in Dubai
The DET inspection team will visit your property within one business day of submitting your application. After obtaining the inspection and classification rating, you must apply for a hotel tourism license from DET. Then register for the Tourism Dirham Programme Once registered, file a ‘receive guests’ application through the classifications portal to commence operations.
We’ve explained everything what you might be looking on how to set up a hotel business in Dubai. All these things might look really complex for example to get classified and get going in Dubai.
Starting a hotel business in Dubai can be a significant investment. The cost can range from AED 15 million to AED 250 million, depending on several factors such as the hotel’s location, size, and amenities. Here are some key costs to consider:
Trade License Fees: Necessary to legally operate your hotel.
Office Space: Renting or purchasing office space for your hotel operations.
Memorandum of Association (MOA) Fee: Required for the legal formation of your business.
Want to get a detailed estimate for starting your hotel business? We have a hotel business setup cost calculator for you or contact us today for a free consultation service and take the first step towards your successful hotel business setup in Dubai!
How To Set Up A Hotel Business with Bestax
Dubai is a global hub, perfect for starting a hotel business. Your hotel can cater to an international clientele and set new standards in luxury and innovation. To make this process easier, we shared the key rules and requirements you should know before setting up a hotel in Dubai.
However, to make this complex process simplified, you can hire top-notch consultants. Bestax’s experienced consultants and legal advisers can help you. They provide all the information, support, legal requirements, and advice you need to set up hotel business in dubai.
FAQS on How to Set Up a Hotel Business
How much does it cost to start a hotel business?
Starting a hotel business in Dubai can cost between AED 15 million and AED 250 million, depending on the location, size, and amenities of the hotel.
What licenses are needed to start a hotel business?
To start a hotel business, you need a Trade License from the Department of Economic Development (DED) and a Tourism License from the Department of Tourism and Commerce Marketing (DTCM). Additionally, you will need approvals from Dubai Municipality and other relevant authorities.
How do I write a business plan for a hotel?
A hotel business plan should include an executive summary, a business description detailing the concept, mission, and vision, and a market analysis of the target market and competition. It should outline the organization and management structure, services and amenities offered, and a marketing strategy for attracting and retaining guests. The financial plan should include detailed projections, startup costs, revenue forecasts, and a break-even analysis.
What are the key factors for a successful hotel business?
Key factors for a successful hotel business include a strategic location that attracts guests, high-quality customer service, a unique and distinctive concept, strong online and offline marketing strategies, and efficient financial management.
How do I find a location for my hotel business?
To find a location for your hotel business, conduct market research to analyze areas with high tourist traffic. Ensure the location is easily accessible for guests and consider the presence and performance of nearby hotels. Proximity to local attractions and amenities is also important.
What is the process of registering a hotel business?
Registering a hotel business involves obtaining initial approval from the DED, securing a unique trade name, and submitting required documents such as passport copies, property documents, and a categorization card. Final approval is obtained from relevant authorities, including DTCM.
How do I finance my hotel business?
You can finance your hotel business through bank loans, attracting investment from individuals or firms, utilizing government support programs like Dubai SME, and using personal savings to fund part of the business.
What are the marketing strategies for a hotel business?
Effective marketing strategies for a hotel business include building a professional website, using social media, improving visibility on search engines through SEO, advertising online and in print media, collaborating with travel agencies and local businesses, and offering special deals and packages.
Disclaimer: The information provided in this blog is for general informational purposes only. For professional assistance and advice, please contact experts
