Saudi Arabia's economy buoyed by smoking ban
Smoking bans in restaurants have impacted economic-related issues in a positive way, though some owners believe this will negatively affect their businesses.
A recent report indicated that the size of the Kingdom's tobacco market was estimated at SR 14 billion and the volume of daily expenditure on cigarettes SR 30 million. The report also mentioned that the Kingdom's smokers ranked fourth globally, with each of them consuming 2,130 cigarettes annually, which is one of the highest smoking rates in the world.
Currently, over 3,500 restaurants and coffee shops have been ordered by the Ministry of Interior to turn into smoke-free restaurants or to shut down. However, experts in the hospitality sector say that the smoking ban would have a significant impact on restaurant owners' clientele.
"Restaurants will lose huge amounts of money with such decisions. A prominent restaurateur in Jeddah told Arab News that the restaurant's daily profit of SR 10,000 is likely to be reduced to SR 500 per day with the implementation of the new order. Adel Makki, a member of hospitality committee at the Jeddah Chamber of Commerce and Industry, corroborated this.
When a businessman decides to open a restaurant, he ventures into the project after conducting a feasibility study that takes into consideration the smoking element as a major source of income, which is why he invests more than SR 10 million in such startups.
Restaurants made huge investments when they were established, particularly as the municipality stipulated that a smoking restaurant should have a space of more than 450 cubic meters," he said. All such restaurants with huge space will now have to lose with the smoking ban, he added. The only solution, according to him, is that restaurants should have two sections one with 30 percent for smokers and the remaining 70 percent specified as a free smoking area.
Habibullah Turkestani, an economist, was forthright that the economy will not be negatively impacted by the smoking ban in restaurants. "The ban will on the other hand strengthen the economy. Investors will not have to spend huge money on tobacco. Such spending has been a waste, because smoking business is not a productive one. Smokers will also benefit by saving the money they have been wasting on cigarettes," he said.
"One must realize the harmful effects of smoking," he said, adding that it is proven beyond doubt that smoking leads to cancer. "We are witnessing a higher rate of cancer patients and hospitals are also spending a lot of money on treatment for such diseases," he said.
However, he adds:"The smoking ban in restaurants will surely lead to huge losses for their owners, but if we look at the long-term effects we'll discover that such decisions will support our economy." One glaring profit area is that people who spend on smoking will now divert their savings to make profitable investments.
According to Turkestani, it is totally unacceptable that restaurant owners considered smoking clientele as their major business segment. "In fact, they should make new feasibility studies based on available financial and economic data to make their business a profitable one," he said.
Mohammed Shams, another economist, felt that the smoking ban in restaurants would not lead to smokers to kick the habit altogether, but their cigarette consumption might drop by 50 percent.
"Smoking-free restaurants will encourage non-smokers and asthma patients to visit them and this might be a positive aspect of the ban," he said. "I believe that such a step will also reduce the amount of money that the Ministry of Health is spending on diseases caused by smoking," he said.
"With the ban, all restaurants will have a level playing field to compete," he added.
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