Summer has traditionally been a slow time for restaurants and food outlets across the country. Six professionals gauge business in an economic downturn.
A bite out of business?
All over the world, the restaurant industry has been affected by the economic downturn, from the smallest independent bistro to the grandest Michelin-star fine-diner. Even the British celebrity chef and restaurateur Gordon Ramsay is having a kitchen nightmare of his own, as his holding company reported an 87 per cent fall in profits.
And for bosses at restaurants and food outlets across the UAE, there is also the summer to contend with. Traditionally, it's the slowest time of year for the restaurant business. As the heat and humidity draw in, many people ship out on extended holidays and trade slowly winds down. This year, with thousands of people being made redundant, restaurants and food outlets feared the worst - would they too have to let staff go, reduce their operating hours or even close down the business? We spoke to six industry professionals to find out how they're coping through the hot months.
James Lagasca, operations manager, Lemongrass Thai restaurant, Dubai & Sharjah. We're all affected. We've seen the slowdown of the flow of customers. At our branch in the food court at Ibn Battuta Mall you can physically see the footfall is down - you don't have to even look at the figures. We're down around 10 per cent. Last year we had positive growth, even during the summer. It was a very nice year.
As an independent restaurant it's very difficult because we have limited resources. We have to work on our own. One of the efforts we have is coming up with localised marketing. We have to come up with offers - discounts, free items. For example, in Ibn Battuta, if you order a main course you get something free, like a beverage. If you order the main course and a soup, you get it for half price. In our Oud Metha branch, we have come up with a different menu. We have priced it just below what you'd find in other reputable Thai restaurants.
Most of our customers are loyal, but we've been observing that a lot have gone. We're noticing a lot of new faces as well. But the people who used to come once or twice a week have not been coming. We have not changed our business hours or the service and standards that we provide. We don't change anything. We haven't let any staff go yet. We still have our head above the water. Nothing too negative has come from the situation, except that we have been forced to think more, to rack our brains for more ideas to bring the customers back. We just have to wait now. Usually business picks up by the fourth quarter of the year and we hope that it will be much better than we have experienced for the first three quarters of the year. We're optimistic. We have to be.
Michelle Naidoo, manager, Options by Sanjeev Kapoor Indian restaurant, Dubai. Business could be better, but we're still getting people slowly coming in. It's not as good as last year. We're doing about 75 per cent of the business we did last year. I think it's a mixture of the recession and the time of year. A lot of people have gone away on holiday, and we're going into Ramadan.
Options has not really been a restaurant that offered discounts in the past, but through feedback from our guests we realised that we had to give discounts. We let new customers have 15 per cent off their bill, which is a once-only offer. We offer a discount to our regular guests as well and add value to their experience, like complimentary desserts. Over Ramadan we'll be offering 25 per cent off iftar bookings of over 10 people, and 25 per cent off the a la carte menu.
The Indian community in Dubai adore Sanjeev Kapoor, so it's definitely helped having that celebrity name behind Options. He's an absolute idol in India. Not a whole lot of people outside the Indian community know about Kapoor, unless he's mentioned by us or they come in with an Indian host. Everyone has felt the bite of the recession, but we're surviving. Hopefully Options will still be standing at the end of it. My guests are still leaving with smiles on their faces; we're trying our best to make them feel valuable during this difficult time. I'm positive we'll come out of this stronger because we're doing our best to keep going. We'll survive.
Reema Baroudi, director of communications and PR, Intercontinental Hotel Abu Dhabi. Business is good. Our restaurants are not as full as they are normally because during the summer season a lot of our regular clients are travelling. In general, June was very good. In July we had a little bit of a drop of about 10 to 15 per cent compared to this time last year in our food and beverage revenue.
Some of our regulars who used to come three times a week are only coming once or twice a week. People don't want to spend the same amounts as before. We've always had special offers. We don't do discounts, but what we work with is making sure that we offer value for money. In Chamas, our Brazilian restaurant, business has hardly been affected because of the value for money. It's about Dh220 per person and the restaurant is full nearly every night.
We've done well in food and beverage because of the trendy new restaurants that we have in Chamas and the Yacht Club. They have been an attraction in Abu Dhabi and they've done well since they opened. They offer something different. At the Yacht Club, we started the business lunch, which is Dh85 per person. It has attracted a lot of business people during the day. You have to be creative and you have to sell to your market on a daily basis. Be alert, be creative and do things that will attract your clients.
We haven't let any staff go. In fact, we're looking for staff. Business has been good. It's all about service, being creative in what you're offering, and being different. We're even opening a new Belgian Cafe in January. Abu Dhabi is on an upward trend, so it looks positive. In this particular summer, to the end of July, sales were somewhat robust considering the situation. Maybe fewer people have gone on leave. But from the end of July to the beginning of August we've seen the normal summer drop, so it's pretty low now.
Nils al Accad, founder, Organic Foods & Cafe, Dubai. We've tried special box prices - cash and carry. We have special offers on every third Saturday of the month. We have Sunday offers starting in September. We're going to be advertising our offers a lot more. Now we have a lot of new people in town so we have to advertise to let them know we're here. It's just a restructuring. OK, business is down at the moment, but for everything that went down, new opportunities are coming up.
In a country like Germany, where historically there has always been an organic movement, in times of recession organic sales go up. People have more time to think about what they're eating. They're not in so much of a rush so they start buying better food. But if my customers are not there anymore, then they can't buy the food. It's a big issue for me, Dubai being more transient. I have to let the new people coming into Dubai know that I'm around.
There's a flip side to everything. It's a restructuring. It depends how the next few months pan out. It depends on the new people coming into Dubai and the industries that pop up to support those people. The quality of living is improving in Dubai, and when the quality of life improves, the economy will follow. And as we reorganise, we're going to end up with a much stronger and more stable economy than what we had.
Rabih Feghali, hotel manager, One to One Hotel - The Village, Abu Dhabi. We are experiencing a typical summer slowdown, or so we are being told. Because we're new, we don't have any history from last year in order for us to be able to compare figures. We can't say that we are very happy with the results, but this is why we've come up with innovative programmes like our scratch and win promotion - depending on how lucky visitors are they can either win 10 per cent or 100 per cent off the price of their next meal. We've advertised a lot this summer. We've spent about Dh100,000 in total.
I think we're not suffering as much as other hotels because we're the newest thing in town right now. The summer of 2009, we believe, is the summer of One to One. There are a lot of hotels and restaurants planned to open over the next few months, but for this year and over the last 12 months, we were the only hotel that opened up with a full range of restaurants - we have about seven restaurants. A lot of people that I know - our restaurant guests included - opted not to travel this year, and ended up staying in Abu Dhabi. That was for many reasons, one of them being the fear of swine flu. But those people are guests of ours and they still want to go out and have fun, so they end up hanging out here. I think that aspect has helped us cover some of the losses of a typical summer in the context of an economic downturn. We're looking forward to a healthy post-Ramadan period. With the Formula One race being the biggest and most highly anticipated event in Abu Dhabi ever, we're really excited that it's coming soon - because we need it!
Rafic Fakih, managing director, McDonald's UAE. Summer is usually busier than other periods. Our sales are higher, especially when it comes to people's favourite cold desserts and beverages. Compared to this same time last year, figures show a normal growth pattern. We didn't witness any impact of the global economic downturn.
We normally don't do any promotions that have to do with price discounts. We believe that we have a very strong value standpoint and run the most affordable quick-service restaurant in the UAE. We haven't let go of any staff or closed any outlets. On the contrary, McDonald's UAE has opened seven new restaurants since the beginning of this year, which required around 100 new employees. Our expansion strategy sees five more restaurants opening before the end of 2009. We are positive about the recovery of the overall business performance in the UAE, and we believe that our business will continue to thrive.