Dubai scrambling to attract middle-market tourists

Dubai is to try and persuade hotel developers to build more three- and four-star properties in the emirate by offering new financial incentives, it has been announced.

The city is to waive the 10 per cent Municipality Fee currently levied on each guest night in a Dubai hotel for new mid-market properties. Any three- or four-star hotel that is approved for construction before October 2017 will be eligible to receive the tax-break for four years of its operations, the Dubai Department of Tourist and Commerce Marketing (DTCM) announced on Sunday at industry event The Hotel Show.

The initiative has been described as a means of “incentivising hotel owners to bring forward their construction timelines, creating more three- and four-star hotel rooms in Dubai more quickly”.

Dubai has committed itself to doubling its annual number of visitors to 20 million by 2020, the year in which it hopes to host the high-profile World Expo event. DTCM director general Helal Almarri told delegates at The Hotel Show: “In order to achieve our headline objective of 20 million visitors per year by 2020, we need to both increase the overall stock of hotel rooms in Dubai and widen the range of options for visitors. In recent years the number of three- and four- star establishments has increased, but it’s vital that we continue to engineer the growth of this range.”

Current industry executives speaking at the event yesterday agreed that Dubai needed to widen its range of hotel accommodation. Russel Sharpe, CEO of Citymax Hotels, said Dubai had about 50 per cent of the Middle East’s five-star hotels and 60 per cent of the emirate’s hotel accommodation could be considered “top-end”. Rising land prices make it tough for those looking to provide more modest lodgings.

“Entrepreneurs who want to build a mid-market brand today, are being pushed out to the suburbs of Dubai because the land prices in the interior of Dubai are too high,” he warned.

As far as the emirate’s target of 20 million visitors a year by 2020 is concerned, he said: “I don’t think the issue will be ‘Will we have enough rooms?’ – it will be ‘Will we have enough different types of rooms?’”

But not everybody is aiming to capture a slice of the budget hotel market. Avsar Koc, regional director of sales at Kempinski hotels, told delegates: “If you are asking if we are going to try to cater to all levels of budget the answer is no – Kempinski will stay as a luxury operator.”

He added: “We are not going to be a supermarket brand just to cater to that segment.”