Dubai’s “Tourism Dirham” launches today, but some are not very happy

The new fee, the so-called “tourism dirham”, which was announced by the Dubai Department of Tourism and Commerce Marketing (DTCM) in January officially launches today, 31st March. It is introduced in order to support the new Dubai Corporation for Tourism and Commerce Marketing body.

In February, the announcement for the new tourism tax was followed by a resolution, issued by His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of The Executive Council. According to the resolution, the fee, which ranges between AED 7 and AED 20 per room, takes effect on 31st March, 2014 and is charging all guests, staying in holiday accommodation. This includes hotels, hotel apartments, holiday homes and guest houses. The Tourism Dirham, according to the DTCM, should be represented as a separate item on the guest bill.

Further announcements explained how much exactly hotel guests would be charged. It depends on the hotel – guests in 5-star hotels are charged the maximum fee of AED 20 per room, per night; guests in 4-star hotels are charged AED 15 and AED 10 for 3-star accommodations. For deluxe hotel apartments, guests will have to pay AED 20 per night, while for superior hotel apartments, the fee is AED 15 per occupied room per night. Guests staying in standard hotel apartments will be charged AED 10. And the minimum fee of AED 7 per night will apply to one-star, budget hotels and guest houses.

In addition, hotels failing to provide accurate and complete documentation associated with the Tourism Dirham will be fined AED 15,000. Of course, this will also be enforced in case of accounts manipulation and fraud.

Most hoteliers were optimistic about the introduction of a tourism fee, explaining that it is perfectly acceptable and low for guests. After all, the Corporation of Tourism and Commerce Marketing (DCTCM) is dedicated to the international promotion of Dubai’s tourism and commerce and to the marketing of the Dubai brand. One of its greatest tasks is increasing the number of visitors to 20 million by 2020. The expectations are that the fee won’t deter potential visitors to the city or have an impact on their spending in hotels, restaurants, shopping centers and for other leisure activities. However, some expressed doubt – the expected number of visitors to Dubai may not be influenced, but there is a chance that they may re-consider how they spend. In general, businesses attract more customers by running promotions and offering value-added offers, but not by rising their prices, but there is always a room for  different approach.

Professionals also debate on the issue of future room bookings, many of which have been made before the introduction of the Tourism Dirham. What will happen to the rates visitors have agreed on paying? Of course, according to the regulation, guests will have to pay the Tourism Dirham and this may lead to certain problems. For now, hoteliers are looking for a solution in order to spare their guests the unpleasant surprise. So, generally, the market looks optimistic, but it’s a cautious optimism, which waits for further details to be unveiled by the DTCM.