New tourism and hospitality initiatives, investments in Dubai

This week, Ruler of Dubai, UAE Vice President and Prime Minister Sheikh Mohammed bin Rashid Al Maktoum issued a law that establishes a new body, the Dubai Corporation for Tourism and Commerce Marketing (DCTCM). 

The new Corporation is an affiliate of the Dubai Government’s Department of Tourism and Commerce Marketing (DTCM) and will become the entity responsible for the promotion and marketing of the Emirate of Dubai.

In the wake of Dubai's winning the hosting rights for Expo 2020, the emirate is taking some significant steps for promoting both travel and new hospitality investment. Just last week, Al Maktoum issued a series of directives that are aimed at boosting and streamlining hotel investment and development in the emirate. Under the new guidelines, the hotel construction pre-approval process period will be reduced to two months from the current three to six months.

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This follows on September's incentive to develop more mid-range (three- and four-star) hotels: Eligible hotels will be granted a concession on the standard 10 percent Municipality Fee, which is levied on the room rate for each night of occupancy. The initiative is designed to incentivize hotel owners to bring forward their construction timelines, creating more three and four star hotel rooms in Dubai more quickly. Investors in new hotels will be granted a waiver on the Fee for a period of four years from the date the permit to construct is granted and provided that this date is between October 1, 2013 and December 31, 2017.

But funding for these new developments will have to come from somewhere, and as part of the the new DCTCM, visitors to the emirate will see a slight increase in their hotel rates. Dubai will levy a new fee (the "Tourism Dirham") on a per night basis on stays in hotels, hotel apartments and other short-term stay facilities.“It will be a minimal charge applied to guests staying in one- to five-star hotels, and deluxe and standard hotel apartments,” a DTCM spokesperson told Emirates 24/7.

As of December, Dubai has 82,000 hotel and hotel-apartment rooms, and the number is likely to double by 2020. In November, Dubai hotels recorded the biggest increase in average daily rate in the Middle East/Africa region. The emirate's ADR growth of 9.9 percent to $290.68 outpaced the regional average growth rate. Dubai also has the region’s highest RevPAR at $254.18. The MENA region reported mixed performance results during November 2013, according to data compiled by STR Global.

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