DUBAI, Feb 4 (Reuters) - Dubai will levy a hospitality charge on millions of tourists visiting the Gulf emirate every year in order to finance its international marketing campaign, the office of Dubai’s Crown Prince said.
“This minimal charge will vary between 7 to 20 dirhams ($1.90 to $5.45) per room, per night, dependent on the hotel category and rating, and will be applicable from March 31, 2014,” said the office of Sheikh Hamdan bin Mohammed al-Maktoum.
“Funds raised will support the international promotion and marketing of the emirate and drive growth of its tourism and trade industries.”
Dubai, which receives more than 10 million tourists a year, has no corporate or personal income tax outside certain sectors; various fees and charges account for about 60 percent of government revenues.
The emirate has over 80,000 hotel rooms and hotel apartments which, given Dubai’s high occupancy rates, suggest it might earn some $90 million a year from the new levy.
That sum is tiny compared to the roughly $50 billion of maturing debt which the Dubai government and related entities will have to repay in the next three years, the legacy of the emirate’s corporate debt crisis of 2009.
But Dubai, whose low-tax environment has been key to its success in attracting foreign investment, has been finding ways to boost its revenues from fees over the last couple of years.
Last October it doubled, to 4 percent, the fee charged on property transactions. In 2012 it enforced collection of a fee on housing tenants collected through its electric utility, and it has been expanding paid parking facilities.