Dubai to launch tourism fee in March to help fund Expo projects

The fee will be applied per room, per night, depending on the type of hotel, and will range from Dh7 to Dh20, state news agency Wam said.

The Tourism Dirham, a minimal charge recognised by the industry to help fund Expo 2020 projects, will be applied to guests staying in all hotels, hotel apartments, guesthouses and holiday homes, and wShow more

DUBAI // A hospitality fee on hotel stays will begin at the end of next month, Dubai Government announced on Monday.

The Tourism Dirham, a minimal charge recognised by the industry to help fund Expo 2020 projects, will be applied to guests staying in all hotels, hotel apartments, guesthouses and holiday homes, and will range from Dh7 to Dh20.

The fee, which will be applied per room, per night, depends on the type of hotel, state news agency Wam said.

The funds raised will support international promotion of the emirate and help to drive growth of tourism and trade, Wam said.

The fee was issued by Sheikh Hamdan bin Mohammed, Crown Prince of Dubai and chairman of the Executive Council.

Dubai’s 2020 bid dossier had estimated that hosting the Expo 2020 would cost almost Dh32bn, with Dh 26bn in investments and the rest going toward operating costs.

"The introduction of the Tourism Dirham will support Dubai Corporation for Tourism and Commerce Marketing, helping to ensure our continued competitiveness on the global stage which will be reflected positively on the growth of two of our economic pillars – trade and tourism," said Helal Saeed Al Marri, the Department of Tourism and Commerce marketing director general.

Clarity over the fee was welcomed by the industry, although tourists were unhappy with the additional charge and said it could impact on long-term visitors.

“It sounds like a small amount but it is a daily charge and for regular visitors it will all add up to a much higher hotel bill,” said Alam Hassan, a Jordanian businessman who came to Dubai for last week’s Arab Health conference.

“It is smart to keep the fee low but no tourist likes an extra charge. It may discourage people from staying longer.”

Experts said it was in line with funding the emirate’s growth to prepare for the world fair.

“We’ve been thinking about how Dubai is going to fund the investment needed for infrastructure projects, and it is understandable that this is part of the whole drive to get the required investment,” said John Podaras, a partner at Hotel Development Resources, a hospitality consultancy.

“People are notoriously averse to any extra charge, no matter how small, so it is without a doubt there will be some resistance to it. But it also depends on how it is packaged since it is a small amount.

“In fairness, you are talking about a large number of tourists and, as that number grows it is an equitable way to raise some amount of revenue.”

The Expo, which will run from October 2020 until April the following year, is expected to draw in millions of visitors.

"Many of the 20 million visitors we are targeting will be from the 25 to 55 age segment across our main regional and global source markets," Mr Al Marri told hotel industry representatives last week.

“Additionally, we need to elevate Dubai’s overall business destination proposition to be able to transition from being a regional leader to a truly global hub for business tourism.”

The number of hotels across the emirate is expected to double by the time the Expo begins, with the number of hotel rooms set to rise from 80,000, according to 2012 figures, to between 140,000 and 160,000.

Dubai Government will also allocate its own land to develop three and four-star hotels, all of which will be exempt from the municipality’s 10 per cent fee, regarding occupancy per room per night, for a period of four years. The approval process period for hotel construction has also been reduced from six to two months.