Tuesday, June 10, 2014

Deeming to achieve its targets to welcome 20 million visitors by 2020, while providing quality accommodation facilities to everyone visiting and staying in the city is the major aim of Dubai authorities.  After considering the emerging demands of short term rentals and holiday homes, His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai and leading authorities like Dubai Department of Tourism and Commerce Marketing agreed to implement a new Decree No.41 of 2013 to better regulate holiday home market in Dubai. At initial stages, candidates who are willing to obtain license to become an authorized operator should possess at least 20 properties in the emirate. They are required to submit their application for Initial Approval. After getting initial approval, applicants will have time of three months to complete the requirements to get final license.

What is Decree No.41?

The Decree No.41 of 2013 authorized DTCM to issue licenses to parties who are planning to rent out their furnished residential property on daily, weekly or monthly basis. Everyone intending to rent their home as a holiday home had better meet the defined standards and procedures. DTCM has established a proper database to synchronize the whole process. Applicants can submit their requests to obtain license however, their application could be accepted or rejected after conducting inspections on their properties to confirm the residential unit to meet the essential standards. After considering the emirate area for which licenses are issued, grouped holiday homes in Standard and Deluxe categories adding Holiday Homes in existing Hotel Classification in Dubai. The system is now functional and receiving applications to issue licenses to parties willing to become a licensed operator to rent residential units for short period of time. It has been officially announced that from June 15, 2014 residential property home owners in Dubai who are willing to rent their property as holiday home must possess a licensed operator to lease their home. While their property will become the part of the operator portfolio.

How it benefit tourism sector?

Restricting renting of holiday homes only to licensed operators will significantly benefit the Dubai key industries tourism and real estate. While providing protection against scams the system significantly increases the supply of quality accommodation in the form of holiday homes. Although, DTCM is working with private sector to provide financial incentives to deliver more, five, four and three star hotels; the holiday homes is an efficient addition among short term rental accommodation options. Qualified licensed parties to manage such residential units eliminate visitor concerns. Now visitors can book a private apartment, townhouse or villa for their short stay without worrying quality standards and amenities provided.

How it benefit real estate sector?

On the other hand this decree enables homeowners to earn potential revenue from their second or multiple properties. Renting conventional homes as holiday homes could be a profitable alternative to renting out property on annual leasing. After becoming the part of Hotel Classification scheme, emirate homeowners will become eligible to take advantage of growing number of visitors visiting Dubai in coming years.

Being the business and trade hub of UAE and Middle East, Dubai is already facing continuous rises in total number of visitors every year. The recent success of becoming the host for world event Expo 2020 significantly increases this number. Estimates showed that more than 11 million guests have stayed at Dubai hotels last year which is 10.6 greater than 2012.  If you look at the supply the total number of hotel rooms and apartments at the end of 2013 were 84,534 (611 establishments) with an increase of 5 percent as compared to 80,414 (599 establishments) in 2012. Furthermore, DTCM estimated the requirement of 140,000 to 160,000 rooms to accommodate guests visiting Dubai for 2020.

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