Dubai hoteliers boosted by reduction in municipality fees

Hotels in the emirate are already bracing for a bumper Eid Al Fitr

Burj Al Arab in Dubai is one of the Dubai hotels offering discounts on room rates this Eid Al Fitr weekend. Giuseppe Cacace / AFP

Hoteliers across Dubai have described a decrease in municipality fees as a “win-win” situation ahead of an expected major boost in occupancy levels for Eid Al Fitr.

On Monday, Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai ordered the municipality fee on sales at hotel facilities in Dubai — which will include the cost of room bookings — be cut to 7 per cent from 10 per cent.

Glenn Nobbs, general manager of the Copthorne Hotel Dubai the decrease would likely cause a boost in business.

“As the directive has only just been made public, and we are awaiting the official commencement date, it is a bit too early to say much at this point.

“However, what I can say is there is no doubt that the news is positive and we hope that with the reduced fee, we will see an uplift in business,” he said.

The reduction in fees will have a direct impact on food and beverage sales and will make Dubai’s price point even more attractive than it already is, Mr Nobbs said.

“The end user will benefit from the cost saving, the hotels will benefit as it should help to drive more business in and the Government should also benefit as we should see more business across the emirate,” he said.

A spokesperson for Emaar, that includes The Address hotels and the midmarket Rove range in its portfolio, said the news will boost market confidence and help drive the growth of the hospitality and tourism sectors.

“It will also contribute to higher occupancy levels across the hotels, as it makes room bookings more attractive,” said the spokesperson.

“This will also contribute to increased room revenues in the short- and long-run, and strengthen investments in the hospitality sector.”

The spokesperson said the reduction in fees will also contribute in lower operating costs which will have a trickle-down effect to suppliers as well.

“The decree will also give a definitive boost to the tourism and aviation sectors, led by Dubai’s status as a preferred global tourism and business hub,” they said.

There has been no confirmation yet as to when the new rates will come into effect but the Emaar spokesperson said the company will be implementing them across the board at the first available opportunity.

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Regardless of the decrease in tax, occupancy levels at hotels are expected to soar this weekend.

Guests are set to arrive at Dubai hotels in their droves to celebrate Eid Al Fitr.

Valerie Vayssiere, director of sales and marketing, Fairmont Dubai says she expects the property to sell out over the weekend.

“We anticipate a very busy Eid weekend at Fairmont Dubai with more bookings confirmed in advance compared to last year and a strong pick up over the last two days.

“With our occupancy rates steadily rising day after day, we expect the positive trend to continue and the hotel to sell out over Eid.”

While Ms Vayssiere points out that the majority of guests staying at the property this weekend will be from the GCC, she has also noticed an increase in the number of international visitors.

“As Eid holidays are moving closer into prime tourist season and the weather is still pleasant, we are witnessing the year-on-year growing influx of international footfall,” she said.

“The majority of these tourists are drawn to the UAE’s popular landmarks, family-friendly attractions and shopping malls.”

David Wilson, general manager of the Waldorf Astoria Dubai Palm Jumeirah is not surprised that this year’s Eid Al Fitr is expected to surpass last year’s for hoteliers.

“The property has proven to be a favourite for travellers looking for staycations and getaways over key holiday periods such as Eid Al Fitr and Eid Al Adha. Based on our current business levels we foresee the hotel running at a very healthy occupancy this Eid.”