UAE tourism boost as hotel fee reductions encourage growth and Airbnb popularity surges

Airbnb rates soar as people seek alternatives to hotels in the emirate

Olivier Harnisch, CEO of Emaar Hospitality Group, has welcomed the reduction in government fees for hotels in Dubai.
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The UAE's tourism sector has won a double boost - with Airbnb rates soaring and recent hotel fee reductions already reaping benefits.

Airbnb revenues rocketed by 421 per cent in Dubai between August 2015 and August 2017, according to a report by Chesterton's MENA.

The company provides short term accommodation to travellers across the globe.

According to research by Bloomberg, Airbnb's presence in Dubai continues to grow despite it being one of the most expensive rentals in the world.

The emirate was fifth on a list for the most expensive rentals at an average rate of $185 (Dh680) a night, with Miami topping the list with an average rate of $205, followed by Boston, Reykjavik and Tel Aviv.

It comes as hotels and restaurants in the emirate and in Abu Dhabi were helped by the announcement of a reduction in government fees relating to stays and dining.

The rate was cut from 10 per cent to seven per cent in Dubai from July 1. In Abu Dhabi, the six per cent tourism fee that had been applied to hotel rooms and outlets has been reduced to 3.5 per cent, the municipality fee was reduced from four per cent to two per cent, and the per room, per night hotel fee has gone down from Dh15 to Dh10.

Olivier Harnisch, chief executive officer of Emaar Hospitality Group, was buoyant about the impact of the reduced fees.

"The revision to the municipality fees has had a positive effect for the industry as it brings added value to customers and guests, both at our hotels and our restaurants,” he said.

“With tourism being one of the key drivers of the economy, the introduction of business-friendly initiatives such as this will bolster the sector. Coming as it is in summer, the move will benefit the industry across the board."

David Allan, general manager of the Radisson Blu Hotel Dubai Waterfront, said it was too early to gauge the impact of the lower fees, but that the reduction can only help hotels in Dubai during the summer, the traditionally quieter time of the year.


Read more:

Abu Dhabi to cut tourism and municipality fees at hotels and restaurants

Dubai hoteliers boosted by reduction in municipality fees


“I have noticed a very slight increase in the number of longer term stays,” he said. “However we would expect growth as we are coming out of Ramadan and there has been a softening of the prices because it is summer.”

He said there has also been a noticeable increase in visitors from China.

Naveen Advani, hotel manager at mid-market hotel Rove Downtown, said the reduction of the municipality fee can only help drum up business.

“In the mid-market segment, we see that our guests prefer to enjoy experiences outside of the hotel so this measure helps them save on accommodation and be able to do more during their stay,” he said.

“The reduction increases spending power by adding value and allowing guests to explore more of what the UAE has to offer.”

Rudi Jagersbacher, Hilton president for the MEA and Turkey regions, said that it was still a little too early to measure the impact of the reduced fees but added they can only be welcomed.

“We expect this positive decision to further encourage travellers to enjoy the unique destination of Dubai,” he said.

“The commitment and vision of the government to develop world class tourism in the Emirate gives us great confidence in the market looking forward.”