Dubai boosts rent and fee relief for hospitality and SMEs in wake of conflict

The government of Dubai has approved a Dh1 billion (£200 million) stimulus package and a separate suite of measures to help SMEs operating at Dubai South Business Park.

• Read more: implications of the Middle East conflict for businesses

The stimulus package, effective from 1 April, will enable hospitality establishments, including hotels, hotel apartments and holiday homes across Dubai to defer payment of sales fees on rooms, food and beverages, and related regulatory fees for three months until the end of June.

The scheme also permits hotels to defer payments of the Tourism Dirham for up to three months. The mandatory fee was introduced in 2014 to support tourism in Dubai and requires businesses to collect a fee per room per occupancy. This move is anticipated to improve cashflow for hospitality providers experiencing reduced demand during the conflict.

Other businesses will also be able to defer a range of licence‑ and operations‑related fees, including premium business name fees, licence amendment fees, local service fees, waste management fees and accommodation fees.

These deferral measures are expected to ease short-term cost pressures facing Dubai’s tourism and hospitality sectors and broader economy. The deferrals apply to both new licences and renewals and further guidance is expected to be published at the end of the deferral period. These measures form part of a wider Dh1 billion government stimulus package which will be implemented over the next three to six months.

Separately, Dubai South has rolled out a new support package for SMEs operating at Dubai South Business Park, offering rent‑free incentives linked to contract renewals, greater flexibility on payment deferrals and the temporary waiver of minor administrative penalties.

The package will ensure that existing rental rates will be maintained for eligible renewals, providing cost certainty for tenants across the large urban development which acts as a major growth corridor between Dubai and Abu Dhabi. The measures are expected to be reviewed periodically to reflect market conditions and business needs.

Dubai-based financing expert Seya Rahnema of Pinsent Masons said the packages underscores Dubai’s continued use of short‑term, targeted interventions to support liquidity and business continuity and would provide “valuable breathing space” for both SMEs and hospitality operators in the current financial and business climate.

“Beyond immediate cost relief, the measures are intended to support business continuity and strengthen tenant relationships, with Dubai South confirming that the package will be reviewed and refined as market conditions evolve,” added Rahnema. “The initiative reflects the continued policy focus on SMEs as a core driver of Dubai’s economy, and forms part of broader efforts to sustain economic momentum and support long‑term growth in line with the UAE’s economic objectives.

The package supporting SMEs follows recent efforts by Dubai’s government to impose enhanced customer support requirements for SMEs facing financial difficulty in the country.