Restaurant revenue as a proportion of total turnover for Middle Eastern hotels dwarfs levels found anywhere else in the world. This engenders a huge level of competition between properties, both in terms creating a culinary destination for hotel guests and in how they entice visitors from elsewhere. In this exclusive roundtable, some of the region’s leading F&B directors explain how they are setting themselves apart in a rapidly evolving marketplace.
Across the Middle East, hotel bars and restaurants are thriving. With a full 37% of revenue stemming from food and beverage – a figure that is growing year on year – the region leaves the rest of the world in the shade.
According to STR Global, Dubai is the most profitable market on the planet for F&B, while Doha generates more revenue from F&B than it does from rooms. This situation is far removed from what you might encounter in Europe or North America, where restaurants are typically ancillary to the profits on an overnight stay. Here there is far less competition from independent restaurants, and a real opportunity to entice local and passing trade.
On the one hand, that is good news for those who get it right. Make sure your restaurants and bars are ahead of the game, and you have a strong chance of boosting footfall, while cementing the hotel’s image as a culinary destination.
On the other hand, it means rivalry is fierce, and growing fiercer. No hotel restaurant, however popular, is invulnerable to the threat of others opening down the road.
“Hotel restaurants are a very demanding market,” says Ashley Saxton, manager of food & beverage resort operations at Atlantis the Palm, Dubai. “From our side it’s a constant battle to always come up with the next big idea, the next big contract. All it takes is for service to flip, or for the next hotel to bring the next biggest idea, and before you know it all your guests have gone elsewhere. So you have to constantly up your game.”
Atlantis the Palm currently boasts 23 restaurants, ranging from the famous Japanese joint Nobu to the newly opened Schwafel, which is based on Arabic street food. In a resort of this size, you cannot get by offering casual dining alone – it is important to have all bases covered, from buffet food to bar snacks, by way of signature restaurants and fine dining.
“The one word I would use to describe it would be diverse,” says Saxton. “I don’t think think there are many hotels – not just in Dubai but in the world – that offer the variety we do and the quality as well. If you want to stay ahead of the market, it’s immensely important to have a wide variety of choices, because the number of options here is huge.”
In fact, the region is something of a playground for restaurant-goers seeking something new. Given the demographic breakdown – an unparalleled mix of locals, expats and visitors from every corner of the world – F&B directors are well aware of the need to cater to every palate. This is a market that rewards heterogeneity and frowns upon narrowness of scope.
Teatro, the signature restaurant at Park Rotana Abu Dhabi, takes this philosophy to its logical extreme. The venue offers a mix of Thai, Chinese, Japanese, Indian and Italian cuisines, making it an international restaurant in the most literal of senses.
“Being located in a diverse country like the UAE and in a cosmopolitan city like Abu Dhabi, it is very important for us to ensure that we are catering to different nationalities and offering various cuisines within one outlet,” explains Ameya Sapre, the hotel’s food and beverage director.
“We understand that doing so might place the outlet at risk of losing its identity, but we are very particular about Teatro’s place in the market, where is has successfully differentiated itself from other restaurants that offer a mix of cuisines.”
Variety is the spice
It isn’t just Teatro that might worry about loss of identity. For any hotel that prioritises diversity, a sense of cohesiveness may be the price to pay. By and large, hotels respond by targeting certain restaurants to their in-house guests and others to external clients.
Take the Thai-inspired hotel Dusit Thani Abu Dhabi, which envisions itself ‘as a trusted symbol of Thai values’, and whose signature restaurant Benjarong is in keeping with its overall themes. However, this does not preclude the addition of other eating options (albeit with Thai flourishes) that may entice a wider clientele.
“Keeping true to our Thai hospitality, we make sure to offer something for everyone,” says Rami Zok, director of food & beverage. “The hotel offers a variety of dining concepts: Benjarong is suitable for guests who appreciate authentic Thai cuisine; the international all-day dining venue Urban Kitchen provides theme night dinners to widen the culinary offerings to our guests; and The Capital Grill and Bar, a Mediterranean grill concept, attracts our business clients. A kids’ corner has been included in the ‘Wok with me’ Friday brunch to attract families on the weekend.”
Saxton estimates that at Atlantis the Palm, the restaurants see a roughly even split of in-house guests to external visitors. Obviously the proportions vary depending on the restaurant in question – some being suited to in-house guests, others to Dubai residents looking for something different – but a heartening number of outside visitors do make the journey to the resort.
The same applies at Park Rotana, which caters to very different crowds at Cooper’s Bar, Teatro and Ginger All Day dining. Sapre contends that the split has a lot to do with timing. Whereas around 85% of those eating breakfast are staying in the hotel, the mix changes at lunchtime to around 40% hotel guests. By dinnertime, it drops to just 25%, as the post-work crowd stops by for a drink or meal.
So how can a hotel succeed in tapping into this latent customer base? This is a talking point across the industry: last year, the Arabian Hotel Investment Conference (AHIC) included a panel session entitled ‘The evolution of hotel F&B in the region – where to next?’ to discuss how hotels can capitalise on this rich seam of opportunity.
For Saxton, it’s about being simply, uncompromisingly, the best in class: you can no longer expect just to open your doors and see guests flock in.
“The bar is getting higher and higher across the UAE,” he says. “We always had a lot of restaurants and bars but now we’re seeing a lot of celebrity chefs and Michelin star restaurants coming from overseas into the region. They’re bringing a new insider quality, different produce, different styles and concepts. I think that’s going to be a major trend going forward – everyone’s going to compete to get the biggest names within their restaurants, and as the competition grows the demand for it is going to grow as well.”
Bigger and better
This swing towards bigger and glitzier names has been happening for a while. Gordon Ramsay’s Verre, which ran in the Hilton Dubai Creek Hotel from 2001-2011, arguably spearheaded the trend, but was widely believed to have lost its edge in the face of growing competition.
Today, Intercontinental Dubai Festival City includes an award-winning restaurant by the three-Michelin star French chef Pierre Gagnaire; Gary Rhodes’ RW1 opened at Grosvenor House Dubai last year and Atlantis the Palm plays host not just to Nobu, but also a venture by Italian celebrity chef Giorgio Locatelli. Other hotels house international fine dining chains including Hakkasan and The Ivy.
At the same time, we have seen the emergence of a quiet counter-trend towards more locally developed food concepts and greater authenticity.
“One of the current trends in Abu Dhabi is that restaurants are starting to use more and more local and sustainable produce rather than importing all the ingredients,” says Zok. “We have also noticed guests are health conscious and we are increasing our culinary offerings to appeal to those wishing to make smarter food choices. At Dusit Thani, every cuisine is prepared with fresh, seasonal, nutritionally balanced and wholesome ingredients.”
“We are seeing a trend towards the offering of healthy dishes and a healthy section on the menu,” agrees Sapre. “All restaurants will be focusing on these matters more and I believe that soon we will start seeing awards given to the best sustainable outlets.”
A hotel restaurant, it seems, may sink or swim based on its attunement to the local market. How are guests’ preferences changing? How can they be better targeted via social media? What is the competition doing and what can be done to top that? All of these are questions F&B directors might ask, while taking care to ensure their offering tells a story and strikes an emotional chord.
“It’s important to look at all your restaurants and redevelop them, keeping up with the times and trends and the constant change the region demands,” says Saxton. “Whatever we do, it has to be the best in the market in all aspects, whether that be culinary based, serviced based, or just to do with the experience overall.”
This isn’t a simple task, and requires that all F&B directors up their ante. But as the Middle East fast becomes the global benchmark for hotel food and beverage, it is clear there are exciting times ahead for the hotels that manage to keep pace.
This article appears in the Spring 2015 edition of Hotel Management Middle East.