Dubai has set itself an ambitious target of closing 1,000 hotel blocks by 2020, and in its bid to keep hotels open and working, it has announced a new “temporary accommodation” policy that will allow visitors to stay in hotels for an additional five days.
The announcement comes as Dubai’s tourism industry continues to suffer from the global downturn.
Tourism revenue fell by 8.3% in the third quarter of last year, the most in the Middle East and North Africa region, according to Dubai tourism ministry data, and hotels are facing stiff competition from new arrivals and the influx of holidaymakers from China.
The Dubai government, which has been under pressure to make up for lost revenue, has made a number of proposals in recent years to reduce the hotel occupancy rate, such as reducing the number of hotels from 300 to 200 and offering a subsidy to hotels for providing short stays.
The new policy, announced in the Dubai Tourism and Travel Authority’s (DTTA) annual report, will allow guests to stay up to five days in hotels without a booking fee, a hotel will receive a flat rate of $400 (US$440) for a single night, and an additional $50 (US€46) for each additional night in the hotel.
The DTTA said the hotel subsidy would cover the cost of renting rooms at hotels in the country, which is about $20 to $30 per night.
The hotel subsidy will also cover any costs incurred by the host to manage the guest’s stay and provide security for the guests, the DTTA added.
The policy comes as a response to growing criticism over hotel occupancy rates in Dubai, which are falling sharply in line with global trends, and as hotel occupancy in the city has also fallen in recent months, the hotel industry has warned.
The trend of falling hotel occupancy has been highlighted in a recent survey by the Dubai Hotel Association, which said it was the “largest source of stress” for hotel owners and staff in the Gulf emirate.
In recent months there have been reports of guests in the resort being harassed and forced to pay a large sum to stay at a hotel, and several hotel chains have had to pull back on hotel nights, amid mounting criticism over the industry’s plight.
The latest hotel occupancy survey, which was conducted in the spring, found that the hotel sector was struggling to attract guests, with more than 90% of respondents saying they were unhappy with the situation.