Dubai: A brand new entrant to Dubai’s restaurant and café scene has no plans to quit – despite having $2 million on the line in launching the operations. This despite the current crisis stalking the F&B industry in the form of the coronavirus and the strict rules of engagement set for the restaurant business.
But the promoters of The Tea Terrace Restaurants and Tea Rooms intend to take a lot more precautions to stay safe business-wise.
“Of course, we expect the first year to be significantly impacted by the lower turnout expected - especially if airports remain closed,” said Ehab Shouly, who launched in London in 2010 and has deployed “robots” to do the serving.
“There are four-and-a-half months between now and our planned opening - so a lot can happen. If by October, things are still gloomy then we will not open until we are sure the market conditions are good enough.
“With the ways things are now, it would be a bad thing to open as you would incur more losses than if you remain closed.” (For the location, they had taken a spot at The Beach.)
High-risk environment
F&B businesses are going through the worst crisis ever. The pandemic outbreak meant there has been a sharp drop in overall delivery orders, while the dine-in numbers since the April 25 partial openings are anemic. UAE’s restaurant and café owners have made requests to local authorities for some sort of relief package that would help them tide over the next few months.
It’s into this environment that The Tea Terrace is stepping into… and with an outlay of $2 million.
“This takes into consideration the initial investment required, which is payment of first year’s rent and security deposit (around $1.2 million) and the cost of the fitout and construction of building extension,” said Shouly. There is also the “startup costs such as licensing, insurance, visas and other administrative costs.”
Wouldn’t delaying the launch of operations make better sense? “We have asked Meraas (the landlord) and Merex to consider allowing us to delay the launch past October if the situation does not look promising then,” he added. “They have expressed flexibility - so we will follow a wait-and-see approach.”
First to come with relief
The Meraas-Dubai Holding combine was among the first to announce relief measures for their commercial tenants once the full nature of the COVID-19 crisis became apparent, and what it would mean for key sectors.
The Dubai master-developers have come up with options on how tenants can secure temporary and longer term relief on payment commitments.
Shouly said his contractual obligations will not get in the way of a possible delay in launch. “We were assured that this will not be an issue as they are thinking long-term and want to make sure that we are successful.
“It's a two-way road and both tenants and landlords in Dubai and the world over have to make the situation work. I'm aware that there are many landlords who are not being cooperative and insisting on charging without any rent reductions. They will end up pushing their tenants towards bankruptcy and end up with an empty property for a long time.
“We believe government-owned entities or landlords like Meraas and Nakheel will be more pragmatic and think long-term.”
Future-proofing
Since there’s a four-month lead-time before launch, Shouly has had more time to rejig the design and fitouts to suit the times. “Adapt to make it in such a way that allays the fears of people,” he said. “For example, we are investing in a “sanitization tunnel” at the entrance and designing the spacing of tables in a way that allows our food delivery robots to navigate between tables.
“We are investing in a sanitisation robot that uses UV pulse lighting to sanitize the entire space using UV lighting. It has been used in China and proven successful. We are also bringing in technology that will minimise the need for waiting staff to visit the table during the meal to ask if there is anything they need.”
With the robots and some luck, Shouly is hopeful of meeting the launch timelines. But pulling out in full is definitely not on his menu.
