Monday, May 30th, 2016

Abu Dhabi hotels need to pay municipal fee from June 1

Narada Desk | May 30, 2016 5:52 pm Print
4% of each guest’s bill plus Dh15 charge per room per night will be the municipal fee for hotels in Abu Dhabi.
Abu Dhabi Hotels

Abu Dhabi: Hotels in emirate of Abu Dhabi will start paying municipal fees amounting to four per cent of every guest’s bill plus a charge of Dh15 per night per room from June 1.

In a statement issued on Sunday, the Department of Municipal Affairs and Transport along with the Tourism and Culture Authority (TCA) announced that the fee will come into force from the beginning of the coming month.

However, a representative from Rotana Hotels suggested that the government postpone the implementation date.

Addressing government officials at the Abu Dhabi Business Forum, the representative said it would serve Rotana better if the date is pushed back especially as hospitality industry now faces falling revenues on the back of a drop in demand.

The strength in the US dollar, to which the UAE dirham is pegged, has made the country a more expensive destination especially when compared to Europe, Russia, and China where currencies are depreciating. All three markets have long been some of the UAE’s biggest source markets for incoming tourists.

In its statement, TCA said it has formally notified hotels and tourist facilities of the decision to start collecting fees, and stressed the importance of entering municipal fees separately from tourist fees in all financial registers.

TCA also said it will soon hold workshops to discuss the collection and deposit mechanisms of the fee.

In early April, the fee was announced as part of resolution No. 15 of 2016 issued by His Highness Shaikh Mohammad Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces and Chairman of the Abu Dhabi Executive Council.

Under the resolution, the fee will then be deposited in the government budget and invested in boosting the tourist infrastructure of Abu Dhabi. It will also help enhance the services on offer to hotel guests.

When the news on the fees first came out, analysts said that they did not expect it to have a significant impact on hotel performance.

Rashid Abu Bakr, associate director at TRI Consulting, earlier told Gulf News, that the introduction of a similar fee in Dubai two years ago did not have an impact on demand.

He said earlier that they would think this is part of the UAE’s diversification plan post oil. They’re also spending a lot of money on tourism promotions and travel to promote Abu Dhabi as a destination to many source markets, so it’s a way of [balancing] that out.

The move follows the launch of the tourism dirham by Dubai’s Department of Tourism and Commerce Marketing (Dubai Tourism) in 2014. The fee is imposed on guests staying at hotels and hotel apartments in Dubai per room per night, and passed on to Dubai Tourism.

However, unlike Abu Dhabi, the fee is not standard across all hotels in Dubai. A fee of Dh20 is charged by five-star hotels in Dubai, Dh15 by four-star hotels, Dh10 by two- and three-star hotels and Dh7 by one-star hotels.