Investment incentives to keep pace with the increasing needs of visitors for hotel units in Dubai

Based on Executive Council Resolution No. (68) of 2025 issued by His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, Deputy Prime Minister and Minister of Defence, in his capacity as Chairman of the Executive Council of the Emirate of Dubai, the Department of Economy and Tourism in Dubai launched new investment incentives, to encourage investment in new hotel establishments in high growth areas in Dubai, to keep pace with the continuous increase in the number of international visitors.

The initiative, which comes as part of initiatives to stimulate economic growth in Dubai, stipulates the return of 100% of the Dubai Municipality fee on room sales and the tourism dirham for hotel establishments that were licensed after the issuance of the aforementioned decision, for a period of two years from the date of their opening and starting to receive guests.

The initiative aims to meet the increasing demand for hotel establishments in areas witnessing significant growth, including: Dubai South, Palm Jebel Ali, Dubai Parks, and Dubai Islands, in light of the continued implementation of specific projects aimed at achieving the goals of the Dubai Economic Agenda D33.

During the first eight months of this year, Dubai received more than 12.54 million international visitors, an increase of 5% compared to the same period last year, setting new records over the past two years. The same period also witnessed the booking of 29.03 million hotel rooms, an increase of 4% on an annual basis, with an average occupancy rate of 78.5%, which is among the highest among major international cities, and an increase of 2%. Compared to the first eight months of 2024.

Executive Director of the Dubai Corporation for Tourism and Commerce Marketing, Issam Kazim, said: “Launching new investment incentives to encourage investment in new hotel establishments in high-growth areas in Dubai comes with a decision issued by His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, Deputy Prime Minister, Minister of Defense and Chairman of the Executive Council of the Emirate of Dubai, and is a prelude to a new phase in the process of developing the city’s hospitality system, and thus strengthening “The ability to continue achieving high growth rates for the tourism sector.”

He added: “This trend comes within the framework of Dubai’s tourism strategy, our commitment to consolidating partnerships between the public and private sectors, and adopting a market diversification approach. This initiative also reflects our continuing efforts to develop advanced infrastructure and provide more accommodation options, which contributes to consolidating Dubai’s global position as the best city to live, work, visit and invest.”

The CEO of the Dubai Aviation City Corporation and Dubai South, Khalifa Al Zaffin, stressed that “(the initiative) represents a strong impetus for investment in the hospitality sector, especially in distinguished areas, such as Dubai South, which is witnessing rapid development in its residential and commercial projects.”

He added: “This decision reflects the proactive vision of our wise leadership in enhancing the competitiveness of the business environment and creating an attractive investment climate for the private sector, in a way that supports our efforts in Dubai South to build an integrated economic system that keeps pace with the needs of increasing tourism and urban growth.”

Managing Director of Dubai Holding, Khalid Al Malik, said: “Dubai’s remarkable success in consolidating its position as a leading global center is a direct result of the wise vision of the wise leadership and the ambitious initiatives it has launched, most notably stimulating investors, which continues to attract quality investments, encourage innovation, and advance the process of sustainable growth within key sectors.”

Based on Executive Council Resolution No. (68) of 2025, the Department of Economy and Tourism in Dubai has the powers to receive, study and decide on applications submitted by investors in hotel facility projects, in accordance with the conditions stipulated in this decision, and to verify the availability of all conditions throughout the period of the hotel facility benefiting from the benefits of the initiative.

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Conditions for benefiting from the initiative

In order for a hotel facility to benefit from the initiative: It must be within the aforementioned areas, and be licensed and classified by the Department of Economy and Tourism in Dubai, in accordance with the provisions of Decree No. (17) of 2013 regarding the licensing and classification of hotel establishments in the Emirate of Dubai. The hotel facility must also begin receiving guests within a maximum period of three years from the date of submitting the application, provided that the period for benefiting from the benefits of the initiative does not exceed Two years.