The government of Dubai has announced a massive economic stimulus plan to be implemented in the city of Dubai to give support to businesses, tourism and hospitality industry ahead of the upcoming gluttonous season of Eid Al Adha. The newest shoe lift was approved by Hamdan bin Mohammed Al Maktoum and increased Dubai’s economic support to AED 1.5 billion in two months.
The new measures are projected to help the hotels, restaurants, tourism operators and consumers during one of the peak times of holiday season. Dubai is set to witness significant changes in the architecture of hotel and dining rates for this Eid as residents and tourists of Dubai might witness.
What Has Dubai Changed?
Dubai exempts hotels and restaurants from some of their hotel fees on the temporary basis under the recently approved Stimulus Plan. The authorities have also blocked collection of the Tourism Dirham fee, on top of the hotel fee in the emirate.
The relief package will lower the costs of running hospitality accommodations and aid tourism activity when tourism and travel demand is high as well as a time of regional economic uncertainty.
How Restaurant Bills Could Be Affected?
Aubergine Dubai generally adds a 7% municipality charge to the overall pricing of any hotel restaurants or hospitalities as part of the service. The measure is effective during the relief period, avoiding payment of this charge.
But bearing in mind consumers need to be mindful that the exemption relates more to business than consumers. Restaurants aren’t obliged to decrease the prices of their food and remove surcharges from their bills for consumers today.
Why Prices May Still Look Similar?
While businesses are being provided tax breaks, some company restaurants and hotels may opt to apply those funds to lower operating costs, rather than reduce their prices. According to industry experts, the package primarily assists the operators to keep the price stable during Eid holiday.
This doesn’t necessarily translate to customers’ bills being that much cheaper, though, but the relief package could help to avoid price increases or additional surcharges during high travel periods.
Tourism Dirham Fee Temporarily Suspended
One of the major alterations affects hotel accommodation throughout Dubai. The Tourism Dirham fee has been temporarily suspended with the stimulus and is typically AED 7 – AED 20 per room per night, depending on the type of hotel.
The charge is usually included at check-out. In the relief period, some of the hotels may waive the charge altogether, or may deduct the revenues from it from their promotional Eid packages or room pricing.
VAT Still Applies Across Dubai
The UAE federal VAT of 5% is being fully implemented while the municipal and tourism tax impacts are being adjusted. VAT will also be evident on hotel, restaurant, shopping and entertainment bills during Eid Al Adha taking place.
The UAE Federal Tax Authority (UAE VAT) is also responsible for creating and operationalizing the VAT system—the package for Dubai’s local economy does not include any VAT measures.
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What This Means for Eid Travelers?
The timing of the stimulus package is important because Dubai is heading towards an important tourism wave as part of Eid Al Adha holidays. It is anticipated that the long weekend, particularly for the hospitality sector like restaurants, hotels, malls and entertainment hubs, will have extremely visitor-heavy numbers.
The relief packages are expected to help create a boost in consumer spending, bolster Dubai’s retail business confidence and underpin Dubai’s overall tourism and retail economy at these festive times.
Bookers of hotel accommodation for the Eid holiday period are warned that they should check their hotel invoices and booking terms before their booking is finalized. The rationale is that some resorts might not apply any Tourism Dirham charge whatsoever or certain promotions could be cleverly manipulated.
During holiday time, visitors might be able to make the best decision on the overall value if they compare the hotel’s final bill against advertised room prices.
FAQs
Has Dubai abolished hotel taxes?
No. Dubai has temporarily stopped collecting some “Municipal” fees and collections of “Tourism Dirham” (TD), and continues to collect federal VAT.
How is the tourist Dirham money collected?
The tourism dirham is a hotel stay charge, ranging from AED 7 to AED 20, depending on the classification of the hotel.
Is there still a 5% VAT for Dubai?
Yes. The UAE federal tax on VAT applies to all hotel, food, shopping and entertainment costs.
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