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Islamabad’s hospitality sector may soon receive major financial relief as the Capital Development Authority (CDA) has formally requested the federal government to reduce commercial charges for hotel and motel projects. The proposal, now with the interior ministry for forwarding to the federal cabinet, aims to ease cost pressures that have risen sharply this year.
The issue emerged after CDA revised land use conversion and commercial rates in June its first update in eight years since 2017. The new rates triggered strong pushback from hotel and motel owners, who said the revised fees were too high to sustain new or ongoing projects. Their concerns were later escalated to the Prime Minister’s Office, which directed CDA to review the matter.
Officials said the CDA board discussed the matter on October 21 under an agenda focused on addressing sector wide grievances, particularly regarding Floor Area Ratio (FAR). After detailed discussion, the board agreed that hotels and motels should be treated separately from other commercial activities because of their economic importance and operational challenges. The board did not oppose easing the commercial charges and referred the matter to the federal government for final approval.
A CDA official, while speaking on condition of anonymity, said the move aims to support investment in Islamabad’s growing tourism and hospitality market.
“The hospitality sector has genuine concerns, and relief will help ongoing projects stay afloat,” the official noted.
If approved, the reduction will offer significant breathing space to hotel developers at a time when the city is also expanding its digital and cashless service infrastructure.
