Dubai is one of the most attractive cities in the world and a well-known tourist destination. Dubai attracted almost 10 million tourists until 2018 and the number of visitors is expected to more than double the years to come. The thriving tourism industry also attracts foreign investors who want to set up travel agencies in Dubai. Starting a travel business in Dubai and overall the UAE (United Arab Emirates) has gotten a lot easier. The UAE was listed as one of the world’s most improved economies for doing business in the World Bank’s influential Ease of Doing Business rankings for 2017, surging into the top 30.
Of course, for budding entrepreneurs and business people wanting to launch a travel business in the UAE, this is great news. But there are several things to consider. Having assisted many international travel businesses to open in UAE (mainly Dubai), here are a few things you should be aware of before taking the leap:
- Choose your business activity
The first step would be to decide which kind of travel activity you want to undertake. In Dubai, there are 3 types of travel agency licenses issued by the authorities. They are:
- As a travel agent
- An Inbound tour operator
- An Outbound tour operator
- Apply for a business license
In Dubai, business or commercial licenses (industrial, professional, manufacturing, and tourism) are issued by the DED. All companies, regardless of sector, must at least have a trade license. Usually, the application requires a memorandum of association, depending on the legal form of your business, a certificate of incorporation, and a copy of the shareholder passport. Many businesses require additional licenses from the appropriate licensing authority and, in the case of tourism, the Department of Tourism and Commerce Marketing (DTCM).
- Apply for your tourism license
Your next step is to apply to the DTCM for one of those three additional licences: outbound operator, inbound operator or travel agent.
- Inbound Tour Operator – offers tour packages within UAE and services relating to VISA matters, even includes exhibitions and conferences.
- Outbound Tour Operator – offers tour packages and vacations outside Emirates, even includes exhibitions and conferences.
- Travel Agent – offers selling of air tickets, visa support services, accommodation to the tourist, transport services, and tours.
- Operations requirements
It’s crucial to understand that the government regulates the tourism companies in Dubai. This means that the Dubai government implements certain operational requirements in order to sustain these entities and economic growth. For example, travel companies must have travel agents, handle visa procedures, and have insurance policies that support the implementation of its license.
- Decide the legal structure that fits your business activity
A travel agency in the UAE mainland can be operated as a limited liability company or as a sole proprietorship. Registration and licensing requirements for both these company formation types are different. For example, in the case of LLCs registered as travel agencies, the requirements are tough. When setting up a travel agency in UAE as a sole proprietorship, the business owner will be required to become a certified travel agent.
- Decide your company name
You must know the rules for naming your business in the UAE. For example,
- You cannot use offensive language
- Your company name cannot contain religious references
- Company name should not be like other organization working in the same sector in UAE
- You can include words such as ‘global’, ‘international’, ‘East’ or ‘West’ in your company name, but it involves extra fees, and several restrictions apply.
A company formation specialist will let you know what’s acceptable to the Department of Economic Development (DED).
- Know Your Responsibilities
One of the most essential requirements in learning how to start a travel agency business is to know the extent of travel business owner’s responsibilities. Though the usual knowledge lies in the booking of cruises, airline tickets, and hotel rooms, there are additional services like obtaining the visas, an arrangement of the airport to hotel transportation and even in event planning etc.
- Know your market
Dubai positions itself as a luxury travel destination/market through brilliant PR and marketing. What might surprise many is that it is in fact an incredible price-sensitive market. You, therefore, need to decide whether you are looking for low-margin volume or quality traffic with customers that are happy to pay more for service.
- Build a Network
Start by creating a partnership with other travel companies. This is a common practice for many travel agencies and companies. In that case, you will have both the chance to increase your client and profit. Create new contacts and improve your skills and knowledge on the market.
- Marketing and branding
How are you going to position your company and its services as standing out from the crowd? Once you know the kind of tourism start-up business in Dubai you’re interested in running, and you’ve completed your legal compliance, it’s time to start thinking about how you want to build your company’s profile. This is an important consideration as the travel and tourism market in Dubai is highly competitive.
And last but not least;
- Hiring a Company Formation Expert
Travel agency business is an up-and-coming opportunity in Dubai. The registration process can get tedious and consume a lot of time. Therefore, it is recommended to seek expertise of a business consultant in order to save your valuable time. Good set-up consultants will know the intricacies of the UAE’s constantly evolving regulatory system and how to keep on top of them. Overlooking important details can lead to headaches down the line if you try and do it alone. Set-up specialists can save you time making sure you have all the right paperwork. Our experts here at Riz & Mona Consultancy can guide you through each and every step of the process. Feel free to contact us.