x Abu Dhabi, UAEMonday 24 July 2017

Dubai's services are the world's most expensive

Dubai is the most expensive city in the world for services, especially restaurant meals and hotel stays.

Dubai is the most expensive city for services in a global survey from UBS investment bank, especially when it comes to restaurant meals and hotel stays. The average cost of a basket of 27 services in the city, from haircuts to phone charges and dry cleaning, is US$890 (Dh3,268), making it the most expensive city of the 73 surveyed around the world. It was a steep jump from 28th place of 71 cities on the survey just three years ago, with an average cost of $470. The latest result places it far above the average - , $503 -, and well ahead of expensive cities such as London ($630), New York ($770) and Paris ($770), according to UBS's Price and Earnings Report 2009. Overall, Dubai ranked as the 19th-most costly city on the world survey worldwide for expenses excluding rent, up 21 spots from the UBS's report update last year. Oslo, Zurich and Cophenhagen were the three most expensive cities in the world survey for costs excluding rent. New York, Oslo and Geneva took the top three spots when including rent. According to the latest survey, conducted in March this year, restaurant meals and hotel prices were the most costly contributors, pushing Dubai swiftly up the list, said Brian O'Reilly, UBS's head of wealth management research in the UK. "For example, the price of an evening meal -, three-course menu with starter, main course and dessert , without drinks, including service -, in a good restaurant is $60," Mr O'Reilly said, adding that the average cost worldwide was $39. "Services such as taxi journeys are relatively cheap, but hotels are also comparably expensive, particularly lower-end hotels." The other major factor was inflation, said Mr O'Reilly. "We estimate Dubai's inflation has been among the highest between surveys, averaging 10.6 per cent since 2006. This, of course, has a large impact on the price of services paid in Dubai. For comparison, London inflation has averaged just 2.7 per cent over the same time." Philippe Dauba-Pantanacce, a senior economist at Standard Chartered in Dubai, said inflation was a key component to rising costs in the city. But Mr Dauba-Pantanacce said an equally important factor is falling costs in other cities, while Dubai's costs either grew at a slower rate or stayed constant. "This is partly what happened," he said. "Decelerating inflation and even deflation have been much steeper in the rest of the world than in Dubai. Hence, the other cities have become comparatively cheaper than Dubai." Food prices in Dubai are also above the average, at $426 for a basket of 39 goods, compared with the global average of $385. aligaya@thenational.ae