Bahrain Gives Travel Grace Period on Fees

In response to a sharp decline in tourism since the outbreak of the Iran war, Bahrain has announced an optional deferral of first quarter fees for tourism businesses. 

This means that hotels, serviced apartments, and restaurants won’t have to pay these fees until July 31 this year.

“The move is aimed at supporting business continuity and strengthening the tourism sector’s flexibility in partnership with the private sector,” according to a statement released through the country’s press agency on Monday.

Bahrain charges a 5% tourism levy on hotels and tourism restaurants, plus a BHD 3 ($8) per night accommodation fee for hotels, which is collected quarterly by the Bahrain Tourism and Exhibitions Authority. The agency said it will continue to monitor the industry’s needs and support sector growth and sustain tourism activity.

In 2021, Bahrain announced the 2022-2026 tourism strategy, which aims to receive 14.1 million visitors this year and to elevate the tourism sector’s contribution to the country’s GDP to 11.4%. Although the strategy was on track before the Iran War, there are no post-conflict tourist arrival figures yet. 

Bahrain’s hotel inventory of 20,000 rooms in operation and 22,000 under construction remains modest relative to its ambitions — one room for every 80 residents, compared to one for every 52 in the UAE, according to CoStar.

However, Bahrain has been particularly impacted by the Iran War. On March 6, Iranian missiles targeted, hit, and caused damage to a hotel and two civilian buildings in the country’s capital Manama, authorities confirmed on X. Bahrain’s airspace was closed from February 28 to April 8 and national airline Gulf Air stopped operations until April 9. All of these factors would have deterred inbound tourists. According to CoStar, occupancy dropped from 26.5% in March 2025 to 16.9% this March.

The deferral of the fees will be a boon to a struggling tourism industry.

“The government levy and hotel accommodation fees, typically payable by the end of April, represent a significant operational outlay for hotel operators, as they are calculated based on room revenues and occupancy performance,” said Shaji Abu Salih, vice president of business development and growth at Shaza Hotels and Mysk by Shaza. “By extending the payment deadline to July 31, the government has provided short-term liquidity support, allowing hospitality businesses to better manage cash flow during a period of softer demand and ongoing market adjustment.”

Relief Across The Region

Across the UAE, even smaller emirates like Ajman are moving quickly to cushion the blow — introducing its own relief measures to keep tourism businesses afloat. According to CoStar, occupancy dropped from 82.4% in March 2025 to 46.8% this March.

The Ajman department of tourism, culture and media has introduced a six-month deferral of tourism-fee payments for all establishments in the emirate, effective March 1, Wam reported on April 23.

Businesses will also be exempt from late-payment penalties during license renewal and will not be required to pay event-permit charges for conferences and exhibitions staged before August 31.

On top of that, businesses can pay any outstanding dues in interest-free installments, and visitors get free entry to all of Ajman’s museums through the end of the year. Tourism operators are also exempt from fees to participate in trade shows and promotional events run by the tourism department.

Online travel platform VisaHQ estimates the deferral saves hotels up to AED 25 ($7) per room-night, while the waiver of the AED 350 ($95) event permit fee gives additional relief to properties that host conferences and corporate events. 

Iftikhar Hamdani, area general manager of Bahi Ajman Palace Hotel, told Skift: “The measures reflect a practical understanding of the pressures hotels across the emirate are currently navigating.”

This support package is not the sole effort in the Middle East to keep the travel industry afloat. Dubai announced specific support for hotels and tourism operators from a wider fund of AED 1 billion ($272 million) on March 31. This fund also allows tourism operators to  defer payment for several government fees for three months, including hotel sales fees and the tourism dirham fee.

Hotels in Dubai pay a municipality fee of 7%, value-added tax of 5% and a tourism dirham fee. The municipality fee and VAT are normally calculated on the room rate. The tourism dirham is a per-night occupancy fee levied by Dubai on guests staying in hotels, serviced apartments, and other short-term accommodations and it varies by hotel classification and star rating.