Dubai's ruler eases hotel construction rules

It just got a whole lot easier—and quicker—to build a hotel in Dubai. According to multiple sources, Dubai's ruler, Sheikh Mohammed bin Rashid Al Maktoum, has issued a series of directives that are aimed at boosting and streamlining hotel investment and development in the emirate.

Under the new guidelines, the hotel construction pre-approval process period will be reduced to two months from the current three to six months.

The directives were made in response to recommendations raised by Dubai’s private sector developers, during a consultation workshop organized and hosted by Dubai’s Department of Tourism and Commerce Marketing (DTCM) and Dubai Municipality, and attended by representatives of key investors in the hospitality sector, including Al Habtoor Group, Al Futtaim Group, Al Ghurair Group, Rotana Group, Dubai Holding and Emaar.

A one-stop-shop for all sector approvals will be set up and managed by the Dubai Municipality to help reduce red tape for businesses and ensure the new reduced approval timeframes are met.

Government land will also be allocated for the development of three-star and four star hotels, and Dubai Municipality will work with government-linked master developers and DTCM to identify key locations for hotels. Additional incentives to help ensure the development of three- and four-star hotels include no fees on change-of-use of land for hotel usage and the establishment of a special committee to review the re-zoning of plots.

The directives also call for an additional year of exemption of the 10 per-cent Dubai Municipality fee for any three- and four-star hotels, which begin operating before June 2017.

The directives come as Dubai prepares to welcome 20 million annual visitors by 2020. Hussain Lootah, director-general of Dubai Municipality, said: “In partnership with public and private sectors, we will identify opportunities for streamlining in the hotel development sector, and work together to address them. Our aim is to continue Dubai’s journey, to further progress from our position as the region’s leading tourism and business destination to being recognised as a global leader in trade and tourism.”

Helal Saeed Almarri, director-general of DTCM, added: “Collaboration and consultation between the public and private sector is essential if we are to ensure delivery of the infrastructure, accommodation, events and attractions needed to meet not only the current growth of the tourism sector but the ambitious plan we have for future growth.

In concurrent news, property developer Nakheel has revealed plans to have nine hotel developments in Dubai by 2016. Chairman Ali Rashed said that Deira island is the potential site for the construction of four hotels, along with its existing one, adding to four other developments across the rest of the city.

“We are seriously thinking of expanding in hospitality, which goes along with the vision of the Dubai government of trying to build enough facilities,” Lootah said. “By 2016, we will have nine hotels and more to be announced.”

Hotels in Dubai posted their best revenue figures for December for four years, according to data from STR Global. The emirate's hospitality sector reported a 9.5-percent rise in revenue per available room to $231 last month, its highest since December 2009.