Skip to content
2 min reading time
Published on 23/10/25 – Updated on 23/10/25
Dubai’s Department of Economy and Tourism (DET) has introduced a new incentive scheme for investors to boost hotel development in the city’s high-growth areas. The Crown Prince is determined to maintain Dubai’s status as the destination among the Emirates.
Sheikh Hamdan Al Maktoum—Crown Prince, Deputy Prime Minister, and Chairman of the Executive Council of Dubai—is the driving force behind this initiative, which will allow qualifying hotels to receive full reimbursement of the 7% municipal room tax, as well as the equivalent of the Tourism Dirham, roughly €5 per night in upscale hotels, for a period of two years following their opening.
The measure applies only to new hotels, resorts, and serviced residences located in Dubai South, Dubai Parks, Palm Jebel Ali, and the Dubai Islands. Projects must be approved by the DET, and participating properties are required to open and welcome guests within three years of application.
Issam Kazim, CEO of the Dubai Corporation for Tourism and Commerce Marketing, described the program as “an important new milestone in the development of Dubai’s hotel ecosystem, expanding its footprint in emerging areas of the city while ensuring that we maintain our strong growth trajectory in tourism (…) supporting our goal of making Dubai the best city to visit, live, work, and invest in.”
Among the major stakeholders involved is Dubai Holding, which has spearheaded numerous development projects. Its CEO, Khalid Al Malik, praised “this initiative, which reflects Dubai’s proactive approach to strengthening its hospitality landscape and enhancing its appeal to international investors.”
An occupation rate at 78.5% year round
The scheme forms part of Dubai’s Economic Agenda D33, which positions tourism and hotel performance as strategic priorities—at a time when regional competition is intensifying across the other Emirates, as well as in Oman and Saudi Arabia.
During the first eight months of 2025, Dubai recorded 12.5 million international overnight stays, up 5% year-on-year after two consecutive record-breaking years. This represents nearly half of the 29 million room nights registered in the city’s hotels over the same period, a 4% annual increase. The 78.5% occupancy rate—among the highest worldwide—rose by two percentage points compared with the first eight months of 2024, reinforcing the rationale for renewed hotel construction.
Every week, Hospitality ON team brings you an expert look at the world of hospitality. By becoming a member, you will have access to a complete ecosystem: exclusive content, jobs, etc.
