Why this could be happy hour for tourists in Dubai after the alcohol tax is abolished

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(CNN) – Dubai is a huge draw for visitors, attracting almost 13 million international tourists from January to November 2022. They come from all over the world to tan on the sandy beaches, shop in the extravagant malls, dine in world-class restaurants and even drink in the city’s many bars.
Despite Dubai’s popularity as a holiday destination and reputation as the ‘party capital’ of the Persian Gulf, alcohol restrictions have made getting your favorite cocktail in the city an expensive and hard-earned pleasure. But on January 1, Dubai announced it would cut its alcohol tax from 30%, as well as the fee tourists and expats previously had to pay for a license to buy alcohol from shops to drink privately. The license is still restricted to non-Muslims over the age of 21.

This is a significant change for residents and visitors, although it is still illegal to drink in public places such as parks, beaches or malls. And being drunk and disorderly or drink driving can result in a fine or jail time.

The move comes as Dubai faces increasing competition from its neighbours, particularly Saudi Arabia, which is working hard to boost its own tourism sector. Historically, Dubai has been able to attract more tourists than other Gulf countries, thanks in part to a more liberal approach to regulations imposed on visitors. According to data from the World Travel and Tourism Council, in 2022, international visitors spent more than $29 billion in Dubai.

“Dubai has become a global tourist magnet since the tax was implemented because it has so much to offer tourists that alcohol pricing has never been an obstacle,” explains Magdalena Carolak, associate professor of humanities and social sciences at the United Arab Emirates University. Emirates countries.

According to Carolak, the new rules are in line with other social changes introduced in recent years. These include switching to a Saturday and Sunday weekend, which was previously Friday and Saturday, eateries being allowed to continue serving during the day throughout the holy month of Ramadan, with greatly reduced restrictions, and the creation of a new family law for non-Muslim expat residents . The family law came into effect in February and allows expats to deal with matters related to personal status (such as divorce, inheritance and parental rights disputes) without having to return to their country of origin.

“Overall, these social changes make Dubai an attractive city for a long-term presence, rather than just a short-term vacation hotspot,” says Carolak. “The new ruling also removed the paperwork and fees required for residents to apply for a liquor license, which is notable.”

Local impact

But there may be a flip side to the changes. Carolak points out that alcohol restrictions mean Dubai suffers from few alcohol-related crimes such as drink-driving and disorderly conduct.

It is unclear whether the new rules will be permanent. Carolak says the changes will be introduced on a trial basis until the end of 2023. “And no doubt whether they are extended or not will depend on the impact felt in the emirate.”

Samantha Wood, founder of Dubai-based restaurant review website FooDiva.net, believes the new initiative will be a “fantastic boost” to Dubai’s tourism sector.

“We’ve already seen liquor distributors cut their prices by 30 percent for both trade and retail,” Wood told CNN. “The consumer naturally expects restaurants to follow suit and reduce the prices on their liquor lists by the same amount once restocking orders begin.”

But she suspects that not all restaurants will reflect the full tax cut in their prices. “I fear that many restaurants will use this opportunity to minimize the impact of other rising costs and inflation, including the upcoming introduction of corporation tax,” she explains.

According to Wood, the move should also attract wider interest in Dubai from international wine and spirits brands, which in the past found the emirate prohibitive.

“It’s important to note that this new initiative is currently only for one year, a smart move that allows authorities to monitor the situation and see if restaurants are playing ball by lowering prices,” she says. “I hope restaurateurs will see the big picture and reduce prices enough and quickly.”

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