Fiona Nanna, ForeMedia News

7 minutes read. Updated 12:02AM GMT Mon, 16 September, 2024

Uzbekistan has announced a three-year extension of its subsidy program for new hotel developments, offering financial compensation to investors for the construction and equipping of new hotels. The program, originally set to end in 2023, has been extended through 2026 under a presidential decree issued on July 27, according to Gazeta.uz. However, the new decree introduces stricter requirements for subsidy eligibility, making the application process more complex.

Subsidy Extension and New Requirements
Initially launched in 2019, the subsidy scheme faced an abrupt cancellation at the end of 2022. The renewed extension requires hotels to be operational by January 1, 2026, and now includes more stringent qualifications. To qualify, hotels must have at least three stars and five floors, a new criterion added to the subsidy framework. The number of rooms required for eligibility has also increased:

  • For 3-star hotels with 60 or more rooms, the compensation will be UZS 40 million (approximately $3,456) per room.
  • For 4-star or 5-star hotels with 120 or more rooms, investors will receive UZS 65 million (around $5,616) per room.

In areas with no existing star-rated hotels, the subsidy will increase by 50%. The first three 3-star hotels in these regions will receive UZS 60 million ($5,184) per room, while the first two 4-star or 5-star hotels will receive UZS 97.5 million ($8,424) per room.

Support for International Hotel Brands
The decree also extends financial assistance for investors acquiring prestigious hotel franchises. Until December 31, 2026, hotels that secure affiliations with top-tier international brands will receive annual subsidies based on their star rating:

  • $200 per room for 3-star hotels,
  • $400 per room for 4-star hotels,
  • $600 per room for 5-star hotels.

Furthermore, hotels without star ratings will have their expenses covered for obtaining 3-star or higher certifications if they complete this process by January 1, 2025.

State-Supported Infrastructure and Land Allocation
In Karakalpakstan and other regions, the government will auction at least 15 plots for hotel construction through online platforms. Additionally, hotel projects investing $10 million or more will benefit from state-funded engineering communications to facilitate the building process.

To support these subsidies, Uzbekistan’s tourism fund will allocate UZS 150 billion ($13 million) annually from the state budget, ensuring consistent financial backing for tourism-related infrastructure development.

Further Tourism Incentives
Uzbekistan has made concerted efforts to bolster its tourism industry. Starting in 2024, the government will provide up to $100 in subsidies per tourist for tour operators bringing in visitors from low-tourism-inflow countries. In addition, Uzbekistan will cover part of the costs associated with charter flights to major tourist cities such as Samarkand, Bukhara, and Urgench. Organizers of camping and safari tours will also benefit from tax incentives, encouraging further diversification in the country’s tourism offerings.

For investors and developers eyeing Uzbekistan’s expanding hotel industry, these updated policies represent both new opportunities and challenges. While the financial incentives are significant, the enhanced requirements may demand more strategic planning and investments to benefit from the program.

Meta Description: Uzbekistan extends hotel subsidies for three more years, introducing new criteria and increased financial support for investors. Learn about the updated program requirements and tourism incentives.