Dubai cuts fees for new mid-range hotels

More budget friendly hotels could be on the horizon for the Dubai skyline, as the hotel investment industry receives a financial incentive to develop more mid-range properties.

In a move to swell the emirate’s supply of four and three star properties, eligible hotels will be granted a concession on the standard 10 per cent municipality fee, which is levied on the room rate for each night of occupancy.

The initiative is designed to incentivise hotel owners to bring forward their construction timelines, via a collaboration between the Department of Tourism and Commerce Marketing (DTCM) and Dubai Municipality as part of the city’s tourism vision for 2020, which aims to attract 20 million annual visitors to Dubai.

Speaking at a keynote session at the Hotel Show, currently being held at Dubai World Trade Centre, Helal Saeed Almarri, Director General of DTCM said: “In order to achieve our headline objective of 20 million visitors per year by 2020, we need to both increase the overall stock of hotel rooms in Dubai and widen the range of options for visitors.

“In recent years the number of three and four star establishments has increased, but it’s vital that we continue to engineer the growth of this range.
“A number of hotel properties are either under construction or in the planning stages in Dubai and, under the directive of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, this incentive has been designed to bring those properties to market sooner.”

He continued: “While our tourism vision has an end date of 2020, our strategy is focused on continual growth year-on-year, and we want to see the destination offer noticeably broaden every year.

“The equation is simple – the sooner the property opens, the bigger financial incentive the hotel owner will receive.”

Investors in new hotels will be granted a waiver on the fee for a period of four years from the date the permit to construct is granted and provided that this date is between October 1, 2013 and December 31, 2017.

To fulfill this vision, earlier this year, the DTCM introduced a new hotel classification scheme, which became law in May 2013, ensuring that each hotel establishment in Dubai is benchmarked in-line with an international-standard grading scheme.

Other long-term plans include the need to collectively target the wealth of first time global travellers from China, the Indian sub-continent and Africa, by identifying the demands of these travellers and ensuring that Dubai’s destination offer meets these demands – through the development of new hotels, attractions and experiences.

The diversity of the emirate’s leisure tourism offering is to be used effectively and used to drive an increase in the average length of stay.

Almarri stated further: “We continue to focus on three key objectives: maintaining market share in our existing source markets; increasing market share in markets where there is high growth potential; and increasing the number of repeat visits.

“In order to successfully achieve these objectives, it is vital that we harness the collective power of key stakeholders, both in the public and private sectors in Dubai and abroad.”

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