It’s quite possible that on the first Monday of this new year, none of us were interested in alcohol-related headlines. And there were certainly plenty of reasons why you might have missed this story – which came in the gloom of a winter bank holiday before the world went back to work from its Christmas reverie.
But either way, a little bit of information was released into the void on January 2nd; the announcement that, with the advent of 2023, the most glamorous member of the United Arab Emirates has just abolished its 30% alcohol tax – at least for a while.
“Dubai Municipality has temporarily suspended the collection of the 30% levy from alcoholic beverage companies for a period of one year, from the beginning of 01/01/2023 to the end of 12/31/2023,” we read on Twitter using American style dating. “Companies authorized to sell in the Emirate of Dubai have been notified of the decision.”
Sorry if you just stifled a shrug and a yawn. Tax issues in the Middle East – indeed, anywhere – are rarely the most stimulating topics of conversation.
And yet, Dubai’s cranking up the financial burden on those who want to sell beer, wine and more within its borders – and those who want to buy them – is more than a footnote at the bottom of the money pages. It’s part of something bigger: an ongoing struggle to lure tourists to a corner of the planet where sun and sand have long been plentiful, but the competition to fill planes and hotels is generally less obvious.
In short, Dubai has had its own rules for a long time. Since the turn of the millennium, or perhaps a little earlier, it has been the dominant option for beach holidays in the Middle East. True, there are alternatives – Abu Dhabi, located next door, has also opened its doors to Western visitors; Oman, on the other side of the peninsula, has luxury resorts on Zighy Bay.
But for the better part of a century, if you’ve dreamed of guaranteed sweltering weather on a seven-hour or so flight from the UK (even in January and February, temperatures rarely drop below the mid-twenties Celsius), you’ve probably been looking at the Emirates, where a five-star retreat gleams next to the tallest building world and a hotel with a helipad.
In 2019 – the last year in which the statistics were not somewhat wiped out by the pandemic – 16.7 million international visitors visited Dubai. Some 1.17 million of them – seven per cent of the total and the country’s third largest demographic – were from the UK.
Even in 2021, when Covid was still lurking, 420,000 Brits flew in to spend a few days in the shade of the sail-shaped Burj Al Arab. Dubai is a big hit with sun-seekers from these shores, and not much less popular with other Europeans (Germany is Dubai’s second largest European market, though the numbers are roughly half that of the UK).
But something is happening in the dunes. Dubai’s position as the obvious choice for the sun in the Middle East is indisputable, but for the first time in 20 years, rivals rally around its throne. Qatar has just spent a month in the world’s spotlight by hosting the men’s soccer world cup – and it’s hoping that will translate into much higher visitor numbers.
Abu Dhabi – Dubai’s bigger, richer Emirati brother – doesn’t like sitting in the shadow of its neighbor. And most importantly for the region, Saudi Arabia has serious plans to become a major travel destination by the end of the decade.
Dubai will not be nervous. Not yet. However, loosening alcohol tax rules is an early indication that it needs to make its product more attractive to stay ahead of the competition. The abolition of this 30% levy will not significantly change the availability or access to soft drinks in the emirate – they will continue to be sold to tourists only in licensed restaurants and hotel bars.
Nor does this change reflect a radical shift to more liberal attitudes. The Foreign Office continues to warn British travelers to “be aware that it is a criminal offense under UAE law to drink or be intoxicated in public” while reminding them that “public displays of affection are not welcome and there have been several arrests for kissing in public.
But the tax cut should, in theory, lower drink prices in a place where a large beer can cost £12 and a glass of wine over £15; no small matter at a time when most are aware of the rising cost of living.
It’s also hard not to look at the 30% cut in the context of recent events just a short flight away. Despite its sporting success, honored by what has already been hailed as the greatest final in tournament history, the Qatar World Cup never really escaped the wider controversy that swirled around it.
And although the sudden decision, taken two days before the opening ceremony, to ban the serving of alcohol in stadiums (except for the directors’ boxes) was of no consequence in comparison with the estimated 6,500 deaths of migrant workers on stadium construction sites – and the banning of even the most basic protests in turf against the illegality of homosexuality in the country – the beer twist passed on November 18 will not escape the attention of those who may be planning a beach holiday in the region.
To be honest, Qatar also allows the sale of alcohol in licensed bars, restaurants and hotels. And he could argue that while he hopes to see soccer tourism grow, he’s not chasing the fly-and-flop demographics Dubai is so popular with. It is true that Qatar has luxury seaside resorts, but in developing its identity as a destination, it took the lead from another emirate.
Where Abu Dhabi has taken a sophisticated approach to attracting visitors – opening facilities at the Louvre and the Guggenheim Museum – Qatar has followed suit. The most important museums in its capital Doha (National Museum, Olympic and Sports Museum 3-2-1 Qatar, Museum of Islamic Art) may not have the same prestige as the aforementioned two giants of the art world – but each of them boasts a building, dramatic and contemporary in architecture , which will appeal to those who travel with culture in mind.
Of course, another game is involved. The future of fossil fuels. Dubai has been remarkably successful in weaning off oil production. Where once “black gold” accounted for 50 percent of GDP, now the figure is less than one percent (tourism is five times more important).
The same cannot be said for Saudi Arabia, where oil accounts for 42% of the world’s oil. GDP and 90 percent export income. No wonder that in times of climate crisis and global concerns about carbon dioxide emissions, the largest country in the region is also trying to diversify its economy. There are many paths to the beach from here.
And that is what will change the Middle East as a sunny destination the most. Saudi Arabia has made no secret of its ambitions to develop the tourism industry. This is covered extensively in “Vision 2030”, a major redesign of the country’s revenue streams announced in 2016 that will allegedly feature a new Saudi by the end of the decade.
A long way
Various malnourished sectors – health, education, infrastructure – are allegedly receiving huge investments. The same is true of tourism – an area where the growth potential is huge. “Tourism generates about 10 percent of global GDP,” said Ahmed Al-Khateeb, the country’s tourism minister, in an interview with this publication in February 2021. “But in Saudi Arabia, we still have about three percent. So we have a long way to go.”
The journey down this “long road to go” began in earnest in September 2019 with the introduction of 90-day tourist visas for travelers from 49 countries, opening up a country that was previously almost a closed shop. This also includes a new focus on Saudi Arabia’s past. For example, the Diriyah Gate project is an attempt to extend access to a UNESCO-listed historic site west of Riyadh, which was the country’s capital from 1744-1818.
But above all, it will be about attracting foreign visitors to the beach. Saudi Arabia can lay claim to 1,640 miles of coastline. About 1,150 of them form a straight line of the western slope where the Red Sea separates Asia from Africa. This is where the main emphasis on tourism 2030 is concentrated; a shore which, in terms of holidays and hotels, remains largely underdeveloped.
You’ve already seen some of the evidence, if only the promotional turnover. With its eyes on the region during the World Cup, Saudi Arabia ran regular advertisements for Neom, the “smart city” that will apparently rise from the desert at the bottom of the Gulf of Aqaba (roughly opposite the Egyptian resort of Sharm El Sheikh). .
You may already know it from gleaming digital footage; a place that is both gleamingly futuristic and claustrophobically medieval in the confined space of a “linear city” that, according to the plan, will extend here; 110 miles long but only 200 meters wide.
Red Sea Project
If that sounds like a pie in the sky (or at least a pie in the sand; little Neom has been built so far), then the Red Sea Project may be more related to reality. Announced in 2017, it involves the creation of 14 luxury hotels near Hanak, roughly halfway between Jeddah (Saudi Arabia’s main port on the Red Sea) and the Jordanian border.
Some of the bolts and nuts of this development are already in place – in particular, part of the new Red Sea International Airport that will serve the area. Designed by the British architectural office Foster + Partners, it is to serve one million passengers a year by 2030. It’s not finished yet, but two days of test flights were put on hold in July.
Is this the future of a halfway beach holiday? Maybe. May not. The human rights situation in Saudi Arabia, needless to say, is appalling; the list of problems (including torture and suppression of protests) listed by the United Nations in its Universal Human Rights Index (uhri.ohchr.org) is long.
Infinitely less important, but essential for resorts seeking to attract Western tourists, is the fact that Saudi Arabia is a dry country where alcohol is both forbidden and welcome. Cocktails by the pool? May not.
Against this backdrop, Dubai’s silent uncorking of a few extra cases of wine – or at least Dubai’s willingness to cut costs – can be seen as less tedious financial fiddling, but rather part of a wider game for tourism dollars, euros and pounds.
Where will we be on vacation in these early, gloomy months of 2030? This regional rivalry will spin a few more bottles beforehand, but the (winter) sun, as always, rises in the east.