With competition for tourism heating up in the Persian Gulf region, Dubai’s New Year’s resolution appears to be attracting more visitors and expatriates, as the emirate this week suspended its tax on alcohol and dropped the fee for drinking licenses.
Dubai’s tolerance of liberal lifestyles, at least compared with its neighbors, has for years made it one of the gulf’s main destinations for tourists and expats, with both groups having to pay a 30 percent tax on alcohol. While Dubai does not allow Muslims — who constitute the vast majority of its citizens — to imbibe, the relaxation of rules will still have far-reaching implications, as about 90 percent of the United Arab Emirates’ population are foreigners.
The relaxation of regulations also comes as alcohol-free Saudi Arabia tries to lure expats from Dubai, one of the UAE’s seven emirates and the region’s economic hub. (In the past year, the UAE also loosened laws governing heterosexual sex and marriage.) Dubai’s population grew by more than 7 percent, to 3.5 million, from June 2019 to June 2022, according to government estimates.
Dubai’s two main liquor retailers said after the new alcohol rules kicked in Jan. 1 that their prices will reflect the change. “New year, new prices!” African and Eastern, one of the retailers, wrote on Instagram.
A license is required for foreign residents in Dubai to drink alcohol, transport it or store it at home. But the roughly $73 fee for the license was also dropped “following the recent directives of the Government of Dubai,” said retailer Maritime and Mercantile International, a subsidiary of the state-owned Emirates Group. The fee was required only of residents, as tourists can receive temporary licenses for free.
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While alcohol is not widely served in Dubai, it can be found in many hotels and other establishments that draw tourists and expats. (The Embassy of the UAE in Washington advises tourists not to ask for alcohol if it’s not on the menu.)
The privilege to drink in Dubai, however, comes at a cost, as many vendors have built the 30 percent tax into beverage prices. A pint of Budweiser costs about $13 at Biggles Pub, a hotel bar near the Dubai airport. Representatives for several hotels in Dubai did not immediately respond to requests for comment about whether they would drop their prices in line with the suspension of the tax.
It was also unclear whether the suspension would be permanent. The Financial Times reported that the changes were part of a year-long trial period. The Dubai government did not immediately respond to a request for comment.
“Drinks out in Dubai are the most expensive drinks that I’ve ever bought,” said Lawrence, a 40-year-old British expat who recently moved to the emirate. He very rarely orders drinks with dinner because of the prohibitively high prices, he said.
Lawrence, who spoke on the condition that only his first name be used as he was not authorized by his employer to speak on the topic, said many expats in Dubai pick up liquor at duty-free stores while traveling. The suspension of the alcohol tax will save him from those errands, he said, although he was not optimistic that the savings would be passed on to customers at bars.
The competition for tourists and foreign professionals is growing stiffer in the gulf region, with countries such as Saudi Arabia and Qatar seeking to wean themselves off dependency on oil revenue.
Saudi Arabia has made tourism a pillar of its Vision 2030 plan, which includes ambitious projects such as one that aims to turn the kingdom’s northwest coast into a “global wellness ultra-luxury destination that focuses on transformative personal journeys inspired by wellness, arts, culture and purity.” But the kingdom’s reputation has been darkened by the state-ordered killing of dissident journalist Jamal Khashoggi, who contributed columns to The Washington Post, and some experts have questioned the viability of such pricey endeavors.
Qatar, a tiny, energy-rich nation often overshadowed by its larger neighbors, gained outsize attention last year when it hosted 2022 men’s FIFA World Cup, in an apparent bid to prove itself as a viable destination for international visitors. But the tournament also drew scrutiny of the country’s human rights issues, particularly regarding its treatment of migrant workers. And it sparked a backlash when its last-minute reversal to ban alcohol sales deprived thousands of thirsty soccer fans of beer.