Abu Dhabi: Abu Dhabi’s decision to cut tourism and municipality fees will give a boost to tourism and spur investments in the hospitality sector, top executives said on Wednesday.
The Executive Committee of Abu Dhabi Executive Council has approved the reduction of tourism fees from 6 per cent to 3.5 per cent and municipality fees from 4 per cent to 2 per cent, according to a report on WAM.
“The Executive Council’s decision to adopt the proposal, put forward by the Department of Culture and Tourism- Abu Dhabi (DCT Abu Dhabi), to reduce tourism and municipality fees will enhance the emirate’s international tourism competitiveness by strengthening Abu Dhabi’s value proposition, and by encouraging investments in the hospitality and tourism sectors,” Mohammad Khalifa Al Mubarak, Chairman, Department of Culture and Tourism, Abu Dhabi, said in a statement.
He added that Abu Dhabi’s hotel establishments would further record high occupancy rates compared to regional and global tourism markets.
“With this decision, hotels and hospitality establishments can achieve more growth and stay in line with the continuous development of the emirate’s infrastructure and its wide variety of cultural and leisure attractions.”
The move comes two days after Dubai announced the reduction of service charges at hotels from 10 per cent to 7 per cent, aimed at attracting more tourists and increase hotels’ profitability.
In a series of tweets on Monday, Shaikh Hamdan Bin Mohammad Bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of Dubai Executive Council, said the latest decision will enhance Dubai’s proposition for both investment and tourism, and is part of government efforts to reduce the cost of doing business and attract new investments.
Having welcomed 16 million visitors last year, Dubai aims to receive 20 million visitors in 2020 as it gears up to host the World Expo.
Heavy investments
The Abu Dhabi announcement comes as the emirate invests heavily to boost tourism, infrastructure and retail sectors.
Earlier this month, Abu Dhabi announced the launch of an economic package of Dh50 billion to accelerate the pace of the emirate’s development and economic growth over the next three years with an emphasis on stimulating tourism and supporting other sectors.
Abu Dhabi already has a number of tourist spots like Shaikh Zayed Mosque and the Louvre Museum on Saadiyat Island. The opening of Warner Bros project in the coming days is expected to give a further impetus to tourist arrivals there.
“This [reduction in fee] move will attract further investment to the capital and underpin Abu Dhabi’s aim to expand its tourism proposition and increase visitor numbers,” said Saif Saeed Ghobash, Undersecretary, Department of Culture and Tourism, Abu Dhabi.
Abu Dhabi is targeting 5.5 million hotel guests in 2018. In 2017, the emirate attracted 4.8 million tourists resulting in nearly Dh5 billion in revenue including that from hotel and food and beverages, according to recent figures released by Abu Dhabi’s tourism department.
There has been a big growth in Chinese and Russian travellers due to the introduction of visa-on-arrival facility for tourists from these two countries.
Commenting on the development, Rashid Abu Bakr, Director at TRI Consulting, said the proposed cut in fees may also help revive GCC (Gulf Cooperation Council) leisure and domestic staycation demand in the summer months which is a low demand period for hotels.
“It’s not clear yet if this is a long-term initiative, but in the short term we certainly expect the fee cut to benefit the hotels in the form of stronger accommodation demand and more guests spending at their facilities,” he said.
Echoing similar views, Martin Cramer, general manager of Emirates Palace, said the latest move will help the growth of tourism as well as leisure sectors in the coming years. “It will help market the emirate of Abu Dhabi as a competitive tourist destination.”
Hotel group Rotana’s area vice president Christian Baudat also welcomed the decision. “This bold move, which will not only help hotels to maximise their revenues but also offer more economic accommodation and dining offerings to guests, will further drive investments in the hospitality sector, thereby enabling the emirate to cater to the rising number of visitors in the future.”
