Dubai on Tuesday launched an incentive programme to encourage hotel development in key areas of the emirate and help accelerate growth in a booming tourism sector.
Under the plan, new hotels built in Dubai South, Palm Jebel Ali, Dubai Parks, and the Dubai Islands will be eligible for reimbursement on all Dubai Municipality room fees and the Tourism Dirham − an additional charge incurred by guests − for two years after opening.
The strategy was unveiled by Dubai Department of Economy and Tourism following the approval of a resolution by Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, Deputy Prime Minister and Minister of Defence, in his capacity as chairman of Dubai's Executive Council.
This move seeks to spur development in emerging parts of Dubai and build on the surge in tourism numbers in recent years.
Dubai hosted 12.54 million international overnight visitors in the first eight months of 2025 − up 5 per cent year-on-year.
The same period also saw 29.03 million occupied room nights at the city’s hotels, up 4 per cent year-on-year, with an occupancy rate of 78.5 per cent, a two per cent rise year-on-year.
Issam Kazim, chief executive of the Dubai Corporation for Tourism and Commerce Marketing, part of the Dubai Department of Economy and Tourism, said the scheme marked an "important new phase in the development of Dubai’s hospitality ecosystem".
"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," said Mr Kazim.
How will the strategy work?
This incentive scheme applies only to hotels registered after the Dubai Executive Council resolution.
The Dubai Department of Economy and Tourism is responsible for receiving, reviewing, and deciding on applications submitted by investors in hotel projects.
It will also determine whether all conditions continue to be met throughout the period during which the hotels benefit from the incentives.
Hotels must apply to the department to take part and must be licensed and classified under Dubai law.
Establishments must start operations and receive guests within three years of applying.
Tourism hot spot
Sheikh Hamdan spoke in August of Dubai's aim to position itself as one of the world's top three tourism destinations as part of the Dubai Economic Agenda D33.
Tourism remains a cornerstone of Dubai's diversified economy, significantly contributing to the country's gross domestic product and job creation.
The Dubai Economic Agenda D33, launched in January 2023, aims to double the size of the emirate's economy to Dh32 trillion ($8.7 trillion) by 2033.
It features 100 transformational projects designed to make Dubai one of the world's top three cities for tourism, trade and investment. Enhancing visitor experiences and attracting global talent are central pillars of the agenda.
Vision for the future
In 2023, Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, approved a new master plan for Palm Jebel Ali – a luxury lifestyle mega project set to occupy an area twice the size of Palm Jumeirah.
The long-planned tourist attraction – spearheaded by developer Nakheel – is to include 80 hotels and resorts, green spaces and other leisure and retail amenities spanning 13.4 square kilometres.
This project will add about 110km of coastline to Dubai, offering beachside living to 35,000 people.
Dubai's plans to build a new passenger terminal at Al Maktoum International Airport are expected to deliver a major boost to Dubai South and adjacent areas.
Once complete, the airport will have "the world's largest capacity" and will be five times the size of the current Dubai International Airport, which is ranked top globally for international passenger traffic.
