For owners
Hotel Apartment Licence vs Holiday Home Permit
4 min read
A Dubai building let to short-stay guests is licensed in one of two ways: as a hotel apartment establishment, licensed and classified as a whole, or as holiday homes, where every unit holds its own permit. The choice shapes the fit-out, the staffing and how flexible the building can be later.
Short answer
A hotel apartment building is licensed and classified as one establishment by Dubai's Department of Economy and Tourism, under the law that governs hotels. It runs like a hotel: a licensed operator, a qualified manager, hotel-style services and a classification that applies to the whole building.
Holiday homes are licensed unit by unit, under a separate law. Each apartment or villa holds its own holiday home permit, classified as Standard or Deluxe, and the permits can sit alongside residents and yearly tenants in the same building.
For most owners of several units, a floor or a building that is not purpose-built as a hotel, holiday homes are the more flexible route. Hotel apartments suit buildings designed and run as hospitality from the start.
Two laws, two kinds of licence
Hotel apartments fall under Dubai's law on the licensing and classification of hotel establishments, Decree No. 17 of 2013. A hotel establishment may not operate until it is licensed and classified, the licence is renewed every year, and the establishment must have a manager in charge of meeting its obligations, with hospitality experience the law sets out.
Holiday homes fall under Decree No. 41 of 2013 and its implementing bylaw, Administrative Resolution No. 1 of 2020. Here the permit attaches to the unit. A holiday home must meet the specifications and fittings set for its category, Standard or Deluxe, and the department inspects registered homes.
Both are regulated by the same department, and both register guests. The difference is the unit of licensing: the whole establishment for hotel apartments, each home for holiday homes.
What a hotel apartment licence asks of a building
A hotel apartment building is run as one hospitality business. That usually means a reception, staff on site, hotel-style housekeeping, and fit-out and facilities planned to the classification the building is aiming for.
It suits a building designed for it: a developer who has planned lobby, back of house and service areas from the drawings, or an investor who intends to run the whole building as hospitality for the long term.
The trade-off is commitment. The whole building is in the hotel business, and changing course later, for example selling units individually or letting some floors on yearly tenancies, is harder than it is with holiday homes.
What holiday homes allow instead
Holiday home permits are granted unit by unit, so a building can mix uses. Some apartments can be holiday homes, some can be let by the month, and others can be on yearly tenancies or lived in by their owners.
That flexibility is why holiday homes suit most portfolios, build-to-rent buildings and developer rental programmes. Units can be onboarded as they are ready, a floor can move between nightly and monthly lets with the season, and units can be sold individually later without unwinding a hotel licence.
The building still has a say. Master developers and owners' associations set their own rules on short stays, and some require a no-objection certificate, so the building's position is the first thing to check.
Which suits your building?
Choose hotel apartments when the building was designed as hospitality, has the space and services a hotel needs, and is meant to stay in that use as a single business.
Choose holiday homes when you own several units, a floor or a residential building, when you want to keep the option of yearly lets or individual sales, or when units will be ready at different times.
If you are a developer still at the design stage, the decision belongs at the start, because it shapes the floor plans, the back of house and the fit-out budget.
Questions to settle before you decide
Does the master developer or the owners' association allow short stays, and on what terms? Is a no-objection certificate needed? Is the building designed with the reception, staff areas and services a hotel establishment needs?
Do you want every unit in short stays, or a mix of nightly, monthly and yearly lets? Might you sell units individually in future? Who will hold the licence or the permits, and who carries the obligations that come with them?
The department publishes the current requirements and fees for both routes, and they are the authority on them. Check the detail with it rather than relying on any summary, this one included.
How fäm Living works with buildings
fäm Living, the holiday homes company of fäm Properties, runs units as licensed holiday homes and monthly stays for owners of single apartments, portfolios, full floors and whole buildings, and for developers at handover. We hold the permits under our operator licence and carry the obligations that come with them.
We have run multi-unit and whole-building programmes at Sarai Villas on Palm Jumeirah, at Mada Residences and RP Heights in Downtown Dubai, and in City Walk. Every engagement starts with a review of the building and what it allows.