Fine dining outlets in Dubai are struggling to attract customers and maintain healthy returns as consumer spending drops, according to Mansour Bin Jabr, partner at Dubai-based hospitality firm 4-Front Facilities.
The company is behind local, mid-market concepts such as Mr Miyagi’s, Stars N Bars and The Scene.
Speaking to Arabian Business, Bin Jabr said customers are no longer able or willing to pay large sums of money for a night out.
“Fine dining is definitely struggling. We have the numbers of a lot of the fine dining restaurants in Dubai. They’re all struggling. I wouldn’t venture there because the spending is going down. People who used to spend AED800 a head are now spending half of that, so revenues are drastically down. And in fine dining, the overhead costs are way too high, so their margins are being hit hard,” he said.
He added that while consumers are spending less partially due to the city’s high cost of living, there continues to be demand for mid-market concepts.
“The cost of living is not the lowest [in Dubai] so people can’t afford to go to these [high end] places. They really can’t. But they still want to eat out regardless. Even if the market situation is down, people still want to go out and have a good time. The market is tough but there is still a gap for good mid-end concepts, not high end concepts,” he said.
Bin Jabr said people should not have to spend thousands of dirhams at high end, expensive venues ‘just to sit around and look good’.
“We’re offering good concepts, not rubbish, but mid-market. I’m talking affordable places offering a good experience, where you can go out, have good food, good drinks and chill with your friends. You don’t need to spend AED10,000 a month for somewhere fancy just to sit around and look good. So that’s what we’re doing and what’s working for us,” he noted.
4-Front Facilities is opening new mid-market Cuban-inspired concept Casa De Cuba in Dubai and Abu Dhabi this year. It is one of six venues planned by the company for 2019. The firm is also planning on franchising its home-grown brands including Mr Miyagi’s to a number of countries abroad.
Earlier this month, Bin Jabr warned against paying hefty franchise fees for international brands which are unfamiliar with the market, encouraging the establishment and franchising of homegrown brands instead.
“[Many F&B companies] go towards fine dining and bring an international brand to let them run it, but we’re bringing homegrown concepts. Why go to an international brand and pay ridiculous franchise and management fees to someone who will come to your own country and doesn’t know how the country or the market works? Why?” he said.
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