In an effort to better serve Dubai’s 10 million and growing visitors, on 8 May 2013 HH Sheikh Mohammed bin Rashid Al Maktoum UAE Vice President, Prime Minister and Ruler of Dubai issued Decree No. (17) (Decree) introducing a new hotel classification scheme aimed at enhancing transparency and modernising the existing classification framework in line with international standards. The Decree covers a larger scope of accommodation facilities than previous classifications and creates new categories and classifications based on quality grades, ratings, locale and activity designations. The scope of the Decree extends to Dubai’s various freezones, including Dubai International Financial Centre.
What are “Hotel Establishments”?
The new Decree applies to “Hotel Establishments”, which are defined as hotels, hotel apartments, guest houses, university dormitories, youth hostels, budget hotels, and floating hotels. Previously, Dubai’s classification scheme covered hotels, serviced apartments and guest houses. The new additions are intended to better provide for ‘budget’ accommodations and educational facilities.
In order to operate, a Hotel Establishment must obtain from the Dubai Tourism Commerce and Marketing Department (DTCM) approval for construction of the Hotel Establishment (as applicable), preliminary approvals to operate, a tourism license, classification in the appropriate category, and a no objection certificate in order to be allowed to receive guests.
Licenses, once issued, are for a term of one year, to be renewed annually at least 30 days prior to the date of expiry. In certain circumstances, and upon agreement with DTCM, the license term may be for a period of up to four years.
The Decree states that the Director General will issue resolutions for applying for new licenses and renewals thereof, and for the documents which must be submitted. Until new resolutions are instituted by the Director General, the application process will remain in line with existing rules and practice.
What are the categories and classifications?
The Decree provides for a total of six categories of Hotel Establishments as set out below. We understand that categories of self catering and timeshare are likely to be introduced in the future.
Click here to view table
Within each category of Hotel Establishment, classifications also apply. Mandatory classifications refer to the quality grades or star rating as indicated in the table above. These classifications, largely in place since 1998, have been enhanced to include a “superior” grade within the category for “Hotel Apartments”, in order to account for facilities in between “standard” and “deluxe” grades.
The Decree allows for optional classifications describing location and facilities or “style” to be added by the Director General of DTCM. We understand from draft DTCM proposals that 19 additional classifications (Designators) are likely to be added, including designations such as “Airport”, “Heritage”, “Island”, “Shopping”, “Boutique”, “Convention”, “Golf”, “Desert”, “Spa”, “Business”, and “Sport”. In the future we are therefore likely to see Hotel Establishments with more than one classification, i.e. in addition to mandatory quality grades or star rating classifications, a Hotel Establishment may also qualify for one or more optional designator classifications such as a Resort holding a five star classification as well as “Island” and “Beachside” Designators.
Recognition to acknowledge merit for exceptional levels of luxury guest accommodation is anticipated to be introduced in the form of what are likely to be known as “Accolades” of ‘Gold’ and ‘Platinum’.
“Grace Period” adjustment of status
The Decree came into effect on 8 August 2013 (Effective Date) and gives Hotel Establishments licensed before the Effective Date a grace period of one year before needing to be classified according to the new standards. Hotel Establishments which have obtained a construction permit before the Effective Date but whose construction is completed after the Effective Date will need to adjust their status within one year from the date of completion of construction.
Ramifications of non-compliance
Penalties for non-compliance now range from AED 100,000 to AED 500,000. Measures such as downgrading of a Hotel Establishment, six month temporary closing, permanent closing and cancellation of the license remain as options for penalties for non-compliance.
The Decree provides for the Director General of DTCM to issue resolutions necessary for the implementation of the new classification scheme and we anticipate that such resolutions will be rolled out over the coming year, outlining the new tiers of classification i.e. Designators, and the procedures and criteria for licensing.
The promulgation of this Decree demonstrates DTCM’s commitment to improve and grow Dubai’s accommodation portfolio, by seeking to achieve uniformity and set high and internationally recognised standards. Benefits include transparency in line with international practices and improved standards, allowing the consumer to conduct specific searches and make informed choices. With record numbers of visitors and a goal of 20 million in the year 2020, the Decree provides a long-term framework to expand on Dubai’s success as a leading global destination.