Too many players are spoiling it for UAE’s F&B

Dubai: For someone looking in from the outside, the UAE’s F&B industry can seem to be in good health. Each of the last four years have seen a rush of new entrants hoping to entice diners and the takeaway clientele with appetising menu choices. And even when growth in the rest of the service sector was losing steam, prospects for F&B was still rated as ‘hot’.

But that’s not necessarily how an insider would rate the sector’s chances. A closer inspection even suggests that it might actually be too flabby from all the growth injected into the last four years.

“I don’t think that it’s fair to say that “new concepts” are rolling off the factory line,” said Elie Khoury, Managing Director of Play and Managing Partner of Treenergy Management. “To be precise, it’s actually the same concepts and the only thing that differentiates one from the other is the name and the interior design theme.

“At the end of the day, this has always been the typical scene over here. Once people feel that a certain sector is profitable, the entire country tries to jump on the bandwagon and many end up failing. This is what separates the men from the boys.

“Think about how many outlets opened up in the last two or three years — [and] where are they now? They have either shut down or are about to. Or perhaps looking to pivot to something else.

“With regards to the pace of new openings stabilising, I don’t see that happening any time soon. People will always try... and if they succeed then great. If not then hopefully they will be in a position to try again.”

Khoury has the credentials to indulge in some straight talking. He had helmed the launch of the Cavalli Club (at the Fairmont Dubai) in 2009 and during which he worked with the mercurial Roberto Cavalli. (In 2011, Khoury sold his shares in ‘White Label’, which had the rights to the brand.)

With his new project, The Play Restaurant & Lounge (occupying 1,200 square metres on the 36th floor of the H Hotel), Khoury is trying to whet the appetite for upscale dining among the UAE’s well-heeled.

Even then, there have been subtle shifts in the nature of the fine dining business. “At one point the mentality in Dubai was bring in any fine dining brand and its going to work — unfortunately that is not the case,” said Khoury. “This showed how immature the market was towards the more sophisticated F&B scene.

“The problem today is that you have two main types that get into this line of business. One only looks at the bottom-line and the other is the high net worth individual who needs a place to socialise and entertain people. Honestly both mentalities are recipes for failure.

“One must not forget that what we are doing falls under hospitality. A lot of people have forgotten what that means.

“In our case, we are fortunate the promoters have the track record as well as the financial means to realise the concept, which I believe is very important. “There are private equity groups who would be interested if a sensible exit plan is presented. Again even with private equity, it’s not just about the money that they bring to the table but the strategic value and understanding of the business.

“If it’s only going to be about the bottom-line, then you risk compromising the quality of your F&B business. Passion and discipline are key to success in this industry.”