Travellers to Dubai could soon benefit from a wider range of accommodation options and potentially better prices, as the city rolls out a new hotel investment incentive aimed at boosting development in fast-growing areas like Dubai South and Palm Jebel Ali.
The initiative, introduced by the Dubai Department of Economy and Tourism (DET), offers full refunds on key government fees for new hotels built in selected districts. Investors behind qualifying hotel, resort, or serviced apartment projects will be reimbursed 100% of the Dubai Municipality fee on room sales and the Tourism Dirham for two years after opening.
More options for tourists
The move is expected to encourage hotel growth in areas such as Dubai Parks and the Dubai Islands, creating more mid-range and family-friendly choices beyond the city’s traditional tourist hubs. The goal is to ease pressure on high-demand zones and better distribute visitor traffic as Dubai’s tourism numbers continue to rise.
“This hotel incentive programme… marks an important new phase in the development of Dubai’s hospitality ecosystem,” said Issam Kazim, CEO of Dubai Corporation for Tourism and Commerce Marketing.
“Expanding its footprint in emerging areas of the city… ensures we can maintain our strong tourism growth trajectory.”
Support for tourism growth
Dubai welcomed 12.54 million international overnight visitors in the first eight months of 2025, a 5% increase year-on-year. Hotel occupancy during that period reached 78.5%, among the highest globally, highlighting continued demand. With 29.03 million occupied room nights recorded, the city is under growing pressure to expand its accommodation offering.
Khalifa Al Zaffin, Executive Chairman of Dubai Aviation City Corporation and Dubai South, said the scheme will help drive private investment into areas already seeing residential and commercial development. “This decision reflects the forward-looking vision of our leadership… to build an integrated economic ecosystem that meets the needs of the emirate’s expanding tourism and urban landscape,” he said.
Investor-driven expansion
The incentive applies only to hotel establishments registered after the resolution’s introduction and licensed under current classification laws. Approved projects must begin operations and welcome guests within three years of applying. The DET will oversee the application and compliance process throughout the incentive period.
Khalid Al Malik, Managing Director of Dubai Holding, called the initiative a key step in attracting global investment. “This reflects Dubai’s proactive approach to strengthening its hospitality landscape and enhancing its appeal to international investors,” he said.
As Dubai pursues its Economic Agenda D33, this programme supports its long-term tourism and urban development goals. By encouraging hotel development in new areas, the city aims to offer more diverse stays for visitors and a broader investment landscape for the hospitality sector.
tanvir@dubainewsweek.com
