To achieve our objective of reaching 20 million visitors per year by 2020, we need to increase the stock of hotel rooms and ensure a wide range of accommodation options is available. This has lead us to take a number of steps to encourage investment in the hotel sector.
One focus is to increase stock in the mid-market segment, so on 1 October 2013 an incentive was announced to encourage speed of delivery and increase competitiveness in this category. Investors and developers of three and four-star hotels were offered an incentive to waive the 10 per cent municipality fee that is levied on the room rate for each night of occupancy, for a specific time frame.
For developers that started construction prior to 1 October 2013, a two-year waiver on the 10 per cent municipality fee will be applicable, as of the first day of operation. For investors and developers who apply for a construction permit after the 1 October 2013, a four-year waiver will be applied from the date construction commences, to encourage efficient completion.
Additional incentives and directives announced in January 2014 focus on reducing the construction approval process to two months; setting up a one-stop-shop for all sector approvals; standardising all approvals through Dubai Municipality; and allocating government land to develop three and four-star hotels.