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Dubai unveils incentive scheme to stimulate hotel development

he Dubai Department of Economy and Tourism (DET) has launched a new incentive programme for investors designed to stimulate hotel development in future high-growth areas in the city. This follows the issuance of Executive Council Resolution No. (68) of 2025 by H.H. Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, Deputy Prime Minister, Minister of Defence, and Chairman of The Executive Council of Dubai, approving the initiative.

Under the initiative, hotel establishments covered by this decision will be reimbursed 100% of the Dubai Municipality fee on room sales and the Tourism Dirham for a period of two years after opening. The initiative applies to new hotels, resorts, hotel apartments, and other facilities approved by the Dubai Department of Economy and Tourism, and located within Dubai South, Palm Jebel Ali, Dubai Parks, and the Dubai Islands.

Issam Kazim, CEO of the Dubai Corporation for Tourism and Commerce Marketing, part of the Dubai Department of Economy and Tourism, said: “The launch of this hotel incentive programme, on the directives of His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, marks an important new phase in the development of Dubai’s hospitality ecosystem, expanding its footprint in emerging areas of the city, and ensuring we can maintain our strong tourism growth trajectory.

Our commitment to public-private partnerships and a diversified market approach continue to be at the heart of our tourism strategy, and this new programme is a testament to our ongoing efforts to further enhance our world-class infrastructure and expand our diverse accommodation portfolio, supporting our goal of making Dubai the best city to visit, live, work and invest in."

Khalifa Al Zaffin, Executive Chairman of Dubai Aviation City Corporation and Dubai South, praised the initiative, highlighting its role in driving stronger investments 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 forward-looking vision of our leadership to strengthen the competitiveness of the business environment and foster an investment climate that attracts private-sector participation, supporting our ongoing efforts at Dubai South to build an integrated economic ecosystem that meets the needs of the emirate’s expanding tourism and urban landscape.”

Khalid Al Malik, Managing Director of Dubai Holding, said: “Dubai’s rise as a leading global hub is the result of visionary leadership and bold initiatives, such as the investor incentive programme, which continue to attract investment, foster innovation and advance sustainable growth across key sectors. This initiative reflects Dubai’s proactive approach to strengthening its hospitality landscape and enhancing its appeal to international investors.

“Dubai Holding is proud to contribute to this progress by developing exceptional destinations that attract global investment, support economic diversification and reinforce Dubai’s position among the world’s most dynamic and future-ready cities.”

The incentive, applicable only for hotels registered after the introduction of the Resolution, is poised to attract further investment into the city’s hospitality ecosystem, enabling it to meet increasing demand amid the continued implementation of the Dubai Economic Agenda, D33. In the first eight months of 2025, Dubai welcomed 12.54 million international overnight visitors, up 5% year on year, following back-to-back record visitation in the previous two years. The same period also saw 29.03 million occupied room nights at the city’s hotels, up 4% year on year, with an occupancy rate of 78.5%, one of the highest among major global cities and up two percentage points compared to the first eight months of 2024.

Based on the Resolution, the Dubai Department of Economy and Tourism is responsible for receiving, reviewing, and deciding on applications submitted by investors in hotel projects. The department will also ascertain that all conditions continue to be met throughout the period during which the hotels benefit from the incentives.

Hotel establishments must apply to the Dubai Department of Economy and Tourism using the approved forms and procedures. They must be licensed and classified under Decree No. (17) of 2013 Concerning the Licensing and Classification of Hotel Establishments in the Emirate of Dubai at the time of application and throughout the benefit period. Establishments must start operations and receive guests within three years of applying.