With an increasing number of international tourists around the world the demand for hotels is rising as well.
Hotels industry is attractive for investors from the perspective of return on investment of already established hotels and expanding of hotel chains and from the perspective of return on investment of new hotel constructions.
Hotel investments incentive regulations are often designed by governments to increase investment in tourism. New investment models and approaches have been introduced by different countries to meet the requirements of new generation with consideration of specific risks related to tourism industry.
Examples for tourism investment inventive laws:
- Tourism Loans from the banks
- Allocation of public rent to investors
- Employment of foreign personnel and artists
- Low rates of utilities, as gas, electricity and water
- Exemption from Alcohol Beverages Regulation
- Tax reduction
- Investment support of SMEs in tourism for value creation
- Free Zones
New Investment Models
Dubai, the largest city of United Arab Emirates, on its own example introduced a new investment model, which often considered as an economic miracle. Dubai with its innovative approach in construction and infrastructure building established short-term big gain economy, sustainability of which can be argued, however, the impacts and developments it achieved cannot be challenged.
Dubai model is mainly based on ‘high added value, minimum costs’ mindset, which has led to establishment of innovative, high-tech and luxury services, deriving the maximum profits due to government incentives for foreign investors, which brought the costs to the minimum level possible.
Dubai is the number one in the world according to hotel occupancy rates. Hotel numbers in Dubai increased from 167 in 1993 to approximately 570 hotels in 2014. Around 140 new hotels are to be constructed by the end of 2016.