Dubai’s $400M in Tourism Aid Buys Time. Operators See Empty Rooms.

Dubai approved an economic incentives package of Dh1.5 billion ($408.4 million) for its tourism and hospitality sector on Thursday, including exemptions from the tourism dirham, municipal fees on hotel room and restaurant sales, and all permit, postponement, and cancellation fees for events. Tourism companies will also benefit from reduced fees for tour guides and desert safari operators, and additional time to settle e-link and hotel classification fees.

The move follows an earlier Dh1 billion ($272 million) support package announced March 31, which deferred — rather than waived — government fees including hotel sales fees and the tourism dirham for three months. The two packages are in response to a demand shock triggered by regional flight disruptions following the Iran war that broke out on February 28.

Hotels in Dubai are typically subject to a 7% municipality fee, 5% value-added tax, and a per-night tourism dirham fee levied by the Dubai Department of