Dubai's decision to scrap a 30 per cent alcohol tax for 2023 has been welcomed by the hospitality sector, but insiders say discounts are unlikely to be passed in full to customers due to rising inflation and operational costs.
The 12-month suspension of the levy on alcohol sales offered a New Year boost to the industry, hot on the heels of one of the busiest final quarters in recent years.
Driven by World Cup regional tourism and UAE visitor numbers returning to pre-pandemic levels, hotels enjoyed a bumper final three months of 2022.
Hotel operators said 2023 was unlikely to match margins achieved last year, but the alcohol tax cut would compensate for other inflationary costs elsewhere.
Sid Sattanathan, general manager of the Radisson Hotel in Damac Hills, recently opened Issei, a Peruvian and Japanese rooftop bar and restaurant where cocktails are about Dh60.
'Prices can't be cut overnight'
As his operational costs have increased, a 30 per cent discount was unlikely to be passed on in full, he said.
“There are lots of things to consider, and we cannot change our prices overnight as we have already purchased stock for around two weeks under the old prices,” he said.
“We will pass on some of the benefit to the customer, but there are so many other inflationary pressures on our restaurants to consider.
“The rising prices of food and fuel have impacted our margins, and we have not passed these extra costs on to our customers.
“This tax cut will allow us to maintain our high standards, to operate fairly and give our guests the quality they deserve.”
Mr Sattanathan said the hotel was likely to pass on some discounts within weeks, once current stock had been replenished at the new discounted rates.
Prices of food and beverages steadily increased throughout 2022 due to global inflation, but began to decrease towards the end of the year, receding to a seven-month low of 4.5 per cent in October, according to global analysts at Focus Economics.
The UAE economy is expected to grow by 7.6 per cent in 2023, up from the 5.3 per cent Central Bank forecast in July.
Great news for businesses and customers
Nick Comaty, vice president for Middle East, Africa, Turkey and India of food and beverage operations and development at Ennismore hospitality, said the tax cut in Dubai would offer a huge boost for business.
“In general, it is great news for the industry, the business and consumers,” he said.
“It is something we were hoping for a long time, it is only a trial basis but hopefully it will remain.
“While alcohol prices are extremely high in restaurants, hotels and bars ― it is not because operators are making a huge margin.
“I have worked all over the world and our margins were always better than here [in Dubai].
“The biggest issue was always the cost, now that has been reduced you will see better pricing across all our venues.”
The Dh270 personal alcohol licence fee has been scrapped as of January 1, while alcohol consumption was decriminalised in 2020 under wider legal reforms.
Alcohol law changed under 2020 legal reforms - in pictures
Previously, a charge for consuming alcohol without a licence could be tacked on if someone was arrested for another offence.
That happened rarely but is no longer enforced at all by law.
A valid Emirates ID is still required to purchase alcohol, and buyers must be 21 and consume responsibly and respectfully.
Alcohol stores across Dubai were busy changing price lists and displaying new offers across their retail outlets on Monday.
The change is expected to result in fewer people travelling to buy liquor in the Northern Emirates, where it has been traditionally less expensive ― without the municipality tax.
“The reality is a lot of alcohol was coming into Dubai from the Northern Emirates, now the prices are more aligned that will be removed completely,” said Mr Comaty.
“You will begin to see a big drop in pricing on some products, but less so on others.
“It is about getting that right balance.
“We have already discussed internally to pass this on to the consumer, but in a way that adds value and better service.
“All restaurateurs need to lead the way by providing better value and discounts for customers.”
UAE v Gibraltar
What: International friendly
When: 7pm kick off
Where: Rugby Park, Dubai Sports City
Admission: Free
Online: The match will be broadcast live on Dubai Exiles’ Facebook page
UAE squad: Lucas Waddington (Dubai Exiles), Gio Fourie (Exiles), Craig Nutt (Abu Dhabi Harlequins), Phil Brady (Harlequins), Daniel Perry (Dubai Hurricanes), Esekaia Dranibota (Harlequins), Matt Mills (Exiles), Jaen Botes (Exiles), Kristian Stinson (Exiles), Murray Reason (Abu Dhabi Saracens), Dave Knight (Hurricanes), Ross Samson (Jebel Ali Dragons), DuRandt Gerber (Exiles), Saki Naisau (Dragons), Andrew Powell (Hurricanes), Emosi Vacanau (Harlequins), Niko Volavola (Dragons), Matt Richards (Dragons), Luke Stevenson (Harlequins), Josh Ives (Dubai Sports City Eagles), Sean Stevens (Saracens), Thinus Steyn (Exiles)
Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
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Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
The%20specs
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SPEC%20SHEET%3A%20APPLE%20M3%20MACBOOK%20AIR%20(13%22)
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AWARDS
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Abandon
Sangeeta Bandyopadhyay
Translated by Arunava Sinha
Tilted Axis Press
UAE currency: the story behind the money in your pockets
Results
2.15pm: Maiden (PA) Dh40,000 1,200m
Winner: Maqam, Fabrice Veron (jockey), Eric Lemartinel (trainer).
2.45pm: Maiden (PA) Dh40,000 1,200m
Winner: Mamia Al Reef, Szczepan Mazur, Ibrahim Al Hadhrami.
3.15pm: Handicap (PA) Dh40,000 2,000m
Winner: Jaahiz, Fabrice Veron, Eric Lemartinel.
3.45pm: Handicap (PA) Dh40,000 1,000m
Winner: Qanoon, Szczepan Mazur, Irfan Ellahi.
4.15pm: Sheikh Hamdan bin Rashid Cup Handicap (TB) Dh200,000 1,700m.
Winner: Philosopher, Tadhg O’Shea, Salem bin Ghadayer.
54.45pm: Handicap (PA) Dh40,000 1,700m
Winner: Jap Al Yassoob, Fernando Jara, Irfan Ellahi.
Ain Issa camp:
- Established in 2016
- Houses 13,309 people, 2,092 families, 62 per cent children
- Of the adult population, 49 per cent men, 51 per cent women (not including foreigners annexe)
- Most from Deir Ezzor and Raqqa
- 950 foreigners linked to ISIS and their families
- NGO Blumont runs camp management for the UN
- One of the nine official (UN recognised) camps in the region
Profile Idealz
Company: Idealz
Founded: January 2018
Based: Dubai
Sector: E-commerce
Size: (employees): 22
Investors: Co-founders and Venture Partners (9 per cent)
Florence and the Machine – High as Hope
Three stars
RESULT
Huddersfield Town 1 Manchester City 2
Huddersfield: Otamendi (45' 1 og), van La Parra (red card 90' 6)
Man City: Agüero (47' pen), Sterling (84')
Man of the match: Christopher Schindler (Huddersfield Town)
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Abu Dhabi GP schedule
Friday: First practice - 1pm; Second practice - 5pm
Saturday: Final practice - 2pm; Qualifying - 5pm
Sunday: Etihad Airways Abu Dhabi Grand Prix (55 laps) - 5.10pm
LEAGUE CUP QUARTER-FINAL DRAW
Stoke City v Tottenham
Brentford v Newcastle United
Arsenal v Manchester City
Everton v Manchester United
All ties are to be played the week commencing December 21.
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SPECS
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Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
Ticket prices
General admission Dh295 (under-three free)
Buy a four-person Family & Friends ticket and pay for only three tickets, so the fourth family member is free
Buy tickets at: wbworldabudhabi.com/en/tickets
Sholto Byrnes on Myanmar politics
Sri Lanka's T20I squad
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MATCH INFO
Everton 2 Southampton 1
Everton: Walcott (15'), Richarlison (31' )
Southampton: Ings (54')
Man of the match: Theo Walcott (Everton)
Qosty Byogaani
Starring: Hani Razmzi, Maya Nasir and Hassan Hosny
Four stars
UAE currency: the story behind the money in your pockets
