India-UAE trips will cost 6-7% more from next year

27 Dec 2017 | By Gogona Saikia
Dubai set to become a costlier tourist destination

UAE, particularly Dubai, is one of the most popular destinations for Indian travelers. But with a new tax on the anvil, trips are set to get 6-7% costlier.

The Gulf country is implementing a 5% VAT from 2018 in the wake of falling oil prices and weakening economy.

Resultantly, those who have already booked trips will also have to shell out more.

In context: Dubai set to become a costlier tourist destination

27 Dec 2017India-UAE trips will cost 6-7% more from next year

TourismHere's an idea of how much Indians love Dubai

In 2016, there were 5.3cr international travelers. Of that, a whopping 1.8cr, over one-third of the total, had traveled between India and UAE.

Only a minor section of them was taking connecting flights, most were destined to UAE.

Mumbai-Dubai and Delhi-Dubai were India's busiest international routes.

International travel portal Thomas Cook offers week-long packages from India to Dubai starting Rs. 30,000.

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VATWhat's the new tax about?

About three years ago, oil prices collapsed, taking a hit on UAE's revenue. To save a weakening economy, it is introducing a 5% VAT on most goods and services from January 1, 2018, including on hotels, sightseeing tours and car rentals.

According to Abu Dhabi-based newspaper National, the cost of living will subsequently increase 2.5%.

Meanwhile, trips from India will cost 6-7% more.

ImplicationBig companies say they will try to minimize the impact

According to Anil Kalsi of Ambe World Travels, cost for travelers will increase "due to 5% tax and compliance cost that businesses will incur".

A leading travel distributor confirmed costs for trips after January 1 will increase even if the bookings had been made before the tax was announced.

However, many big companies have said they will try to minimize the impact on tourists.