Gulf countries: tax-free duty free, no problem

"Two and a half million cartons of cigarettes, 4.47 million bottles of spirits and 3.5 tonnes of gold"... Alongside the ubiquitous incentives to buy tickets online for the latest lottery to win a Porsche 911 Carrera Coupe, the Dubai Duty Free website has fun detailing the results of its 2006 financial year. It's enough to make you cringe to think of the 42,161 kilos of Smarties or the 631 kilos of caviar consumed by passengers over the course of the year.

In the shopping aisles of Dubai airport, 2006 was certainly an exceptional year. With sales of 712 million dollars - 20 % more than in 2005 - Dubai Duty Free now has its sights set on the billion-dollar mark, in the wake of airport works that should enable it to increase its surface area from 7,000 to 20,000 square metres by 1 January 2010. While waiting for this new day of glory, Dubai Duty Free is renovating its existing infrastructure, refurbishing the gemstones shop here, opening a homeware shop there, and developing its external activities with the prospect of opening a five-star hotel.

Sales promotion

In this respect, as in so many others in the region, Dubai is a symbol, but certainly no longer a unique case: according to the Middle East Duty Free Association (Medfa), the Middle East now accounts for between 6 and 7 % of global duty-free sales. The result of extraordinary growth, boosted by spectacular tombolas and punctuated by monster sales on "birthday days" and other festivals.

However, this is not expected to be the end of the story, with duty free sales following the upward trend at regional airports. According to Medfa, the gigantic redevelopment projects currently underway in Doha, Dubai and Abu Dhabi should boost passenger capacity from 33 million to 120 million by 2008, a figure that is set to double once the Dubai World Central International Airport is completed.

Double-digit growth is not confined to Dubai. It has also reached Doha, where sales are now in the region of $100 million a year. It is also affecting Abu Dhabi, where the development of Etihad Airways has changed the customer profile. What's more, Etihad Airways is now serving "secondary" airports. Sharjah airport, for example, recorded a 36 % increase in traffic in 2006, and its $60 million expansion plan aims to increase its capacity to 8 million passengers a year, enabling the duty free zone to double in size. As in Abu Dhabi, the development of Sharjah duty free is taking place in the wake of a driving company, in this case Air Arabia, the region's leading low-cost carrier, whose catalogue of destinations expanded considerably in 2006, notably to India. As for the French, they will be keeping a particularly close eye on the development of duty free in the airports of the Sultanate of Oman. There is a simple reason for this: in December, Aéroports de Paris won the contract to manage Seeb International Airport in Muscat and Salalah airport in the south of the country. Even if, for these airports, the astronomical figures for Dubai Duty Free are still a distant mirage.