Tax Breaks For Dubai’s Three And Four Star Hotels

The Dubai Department of Tourism & Commerce Marketing (DTCM) is planning to introduce tax breaks for three- and four-star hotels to encourage the city’s mid-market growth.

Helal Saeed Almarri, director general, DTCM, said the break, covering the 10 per cent municipality fee, would extend to applications over the next three years.

Speaking at a seminar in The Hotel Show, he said it would apply “for four years from the granting of the building permit”.

The move dovetails with the city’s drive to attract 20 million guests by 2020, driven by corporate, MICE and family travel.

Almarri said he didn’t see any evidence of overheating in the hotel sector. “If anything we need more hotels so that have the right demand and supply. As the market matures, everything is on the cards. We have one of the most diverse source markets…the most important thing, and something that DTCM is most concerned about, is maintaining the service levels and the right HR across hotels.”

Russel Sharpe, CEO of Landmark/Citymax Hotels, said the issue is not whether Dubai has enough rooms, but enough different types of rooms – something which DTCM’s measure is designed to redress. Citymax is planning to build at least two new hotels, one in Dubai and another in the northern Emirates.

“Mid-market hotels will be built in key locations and prices will be reasonable – but the key issue is land prices and they mustn’t run away. They are still escalating,” he said.

He said 60 per cent of total supply is top end in Dubai, in contrast to most cities where 60 per cent is mid-market. “You definitely need to look at every sector – even one or two-star guest houses.”