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Dubai’s mid-range hotels get tax breaks

Luxury hotels in Dubai

City diversifies hospitality offerings to prepare for influx of visitors.

September 30, 2013 12:06 by

In a city that is famed for being a luxury destination – where the world’s largest aquarium, ‘seven-star’ hotel, shopping mall (adjacent to the world’s tallest building and biggest fountain) and indoor ski-slope are within a 20-minute drive from each other – Dubai is starting to catch up on its mid-market growth.

Yesterday, the hotel investment industry was given a financial incentive to develop more mid-range (three- to four-star) hotels and receive a ‘tax break’ – in the form of a concession on the ten per cent municipality fee, which is normally imposed on the room rate for each night of occupancy.

The strategy, announced by the Dubai Department of Tourism and Commerce Marketing (DTCM), is designed to encourage construction timelines to create more three- and four-star hotels at a quicker pace and prepare for the city’s 20-million annual visitors by 2020.

His Excellency Helal Saeed Almarri, director-general of DTCM, made the announcement during a keynote session at the Hotel Show at the Dubai World Trade Centre.

Almarri says that to achieve the objective of 20 million visitors per year by 2020, Dubai needs to both increase the overall stock of hotel rooms and widen the range of options for visitors, adding that this incentive is simply designed to bring those properties into the market sooner.

“In the 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,” he adds.

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

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