A new Decree concerning the regulation of the holiday homes, or also known as short-term rentals, was issued in Dubai. The decree No. 41 of 2013 has the objective of contributing to the growth of the tourism industry by broadening the range of accommodations available to visitors. It dictates that Dubai’s Department of Tourism and Commerce Marketing (DTCM) will be responsible for the granting of licenses to those parties who intend to rent out a furnished residential property on a daily, weekly or monthly basis. [wpsr_linkedin]
The decree dictates that DTCM will define the standards that must be met and procedures that must be followed in order to receive a license; accept license applications and approve or deny such applications; conduct inspections on the properties to ensure they meet the required standards; and create a database of all such licensed establishments in the Emirate. Restrictions will be placed regarding in which areas of the Emirate licenses will be granted and two new classification standards will be added to the existing Hotel Classification framework, with ‘Holiday Homes’ being classified as either ‘Standard’ or ‘Deluxe’.
The regulation of the renting of properties as holiday homes is expected to have a considerable positive impact on two of Dubai’s key industries – tourism and real estate. With regards to tourism, in order to achieve the target of welcoming 20 million annual visitors to Dubai by 2020, one priority is the supply of visitor accommodation and broadening the range of accommodations available is a major part of this.
In September 2013, DTCM announced a financial incentive for the development of new three and four star hotels. Now, the licensing of properties as holiday homes will add further accommodation options.
By including holiday homes as part of our Hotel Classification framework, visitors will be given the option to book a private apartment, townhouse or villa with full confidence that the accommodation is of a quality standard, has the appropriate insurances, and is managed by a qualified party.
With regards to real estate, this decree provides a potential revenue stream for owners of a second or multiple properties: an alternative to renting out the property on an annual lease. By being part of the wider Hotel Classification Scheme, property owners will be able to benefit from the growth of visitor numbers over the coming years.
Following the issuance of the Decree, DTCM will now commence preparations to activate the directives and establish the processes required.
The Hotel Classification Scheme was passed into law in May of this year, with the objective of improving clarity and increasing the type and quality of hotel rooms and accommodation available across the Emirate of Dubai and the services provided within the establishments. The Scheme adopts a multi-layered framework to rate and categorise each hotel and hotel apartments establishment, with specifications on the requirements for different types and levels of Guest Accommodations.
