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News analysis: Will the World Cup have the desired effect on F&B revenue?

Sarakshi Rai, July 3rd, 2018

Every four years, football fever hits the world as the FIFA World Cup is held. The largest sporting event in the world is being hosted by Russia this year, from June 14 to July 15. For the first time in the history of the tournament, four Arab teams have qualified for the group stages, which have seen restaurants in the region garner increased footfall in the traditionally slow summer months.

Featuring 32 national soccer teams, the World Cup captivates billions of people across the globe during its month-long run. The UAE’s hoteliers, for their part, are hoping to capture a fraction of those people.

Although it’s difficult to estimate how much the UAE’s hotels and restaurants stand to profit from the World Cup, evidence from 2014 shows that shisha cafés, sports bars and restaurants in Dubai saw business rise by around 300-500% during the FIFA World Cup, according to marketing firm Research Konnection.

“Summer is normally slow but with the World Cup coming up, and the activities that I have planned at the Belgian Café at InterContinental Abu Dhabi, I do not believe it will be a quiet summer,” said Belgian Café restaurant manager Peter Van Den Berg, who added that he expected a major boost not only during the World Cup, but more so during Belgium’s games.

Ryan Fourie, beverage manager at Azure Beach, is expecting an increase of revenue up to 15% during the daytime and up to 30% in the evening.

“We’re running some noteworthy promotions and have set up extra-large screens in the lounge, so everybody is guaranteed a great view. For the games, we’re offering four draught beverages along with a platter of quesadillas and calamari for just AED230 (US$63) for two people,” Fourie said.

At one of Dubai’s recently opened hotels, Swissôtel Al Ghurair general manager Emiel Van Dijk is expecting thousands of World Cup fans during the month. “We have a World Cup Fan Zone at Swissôtel Al Ghurair where we are all set to welcome football enthusiasts who want to get caught in the football excitement of the FIFA World Cup Russia 2018. Footie fans are invited to cheer for their favourite teams and watch all matches live at our Liwan restaurant and tent while enjoying their choice of  food and beverage options,” Van Dijk said.

“We have set up a special tent on the outdoor terrace of the restaurant, however we also have an indoor option available. We will provide the ultimate game-watching destination with multiple TV screens to enjoy the World Cup action,” Van Dijk added. According to Fourie, the World Cup is a good time to introduce people to a restaurant or F&B brand.

“The World Cup is a great opportunity to introduce our venue to more people. Azure Beach is an established beach club, but we always have something new for our customers. This great sporting event is a good opportunity to showcase our other promotions happening in the venue throughout the year,” he said. For countries with massive football followings, failure to make the World Cup negatively impacts the country’s economy, especially its F&B businesses.

Franco Carraro, a senator of former Prime Minister Silvio Berlusconi’s Forza Italia party, talked to Bloomberg recently in an interview about the impact of the elimination from the event in Russia.

“There is much more to it, including the missed sales for travel operators organising holiday packages to Russia, let alone the turnaround of betting companies and of bars and restaurants across the country during the matches,” he said.

According to Berenberg analysts, the World Cup will have a positive impact on UK pub operators such as Greene King, with the brokerage estimating that some may see a 2-3% boost for sales for the quarter.

However, with the largest Arab contingent ever taking part in a World Cup, the F&B industry in the Middle East is positive when it comes to the additional revenue the tournament will bring.

While some of the outlets with most publicised World Cup tents like Barasti and Atlantis, The Palm Dubai did not want to comment, others we spoke to agreed to share revenue forecasts for the World Cup.

“I believe we will see an increase in our revenue due to this important tournament,” Van Den Berg added.

According to Van Dijk there will “definitely be positive impact on revenues” this summer.

“Definitely, revenues are increasing and will continue to increase, as more activities are being planned for the rest of the summer. It started with Ramadan, followed by World Cup Fan Zone, then more summer surprises to follow; we like to keep our guests entertained with a number of various activities throughout the season,” Van Dijk added.

However, despite the additional footfall predicted by the outlets, almost none of them are hiring additional staff during the World Cup period. Fourie emphasises that instead of hiring additional staff, time management is a key factor during this period.

“Having the right amount of manpower at the right time, and using the fantastic team that we have to the fullest potential, is paramount to ensuring everything runs smoothly and guests enjoy the best experience we can offer,” Fourie said in an interview with Hotelier.

Agreeing with him, Van Dijk added: “Swissôtel Al Ghurair and Swissôtel Living Al Ghurair is a large complex with a significant number of talented, experienced, and well-trained colleagues with diversified backgrounds, who are always excited to be reallocated to support business needs.”

Alain Gobeil, director food and beverage of Fairmont The Palm, said that the hotel will be using Fairmont staff to man the tent that fits around 150 people, as some outlets experience a slowdown during this time period, which allows people to be moved around.

Gobeil further added: “We are hoping that the football tent will give us a noticeable boost in business; the timing is perfect being just after Ramadan.”

According to him, the fact that Fairmont The Palm built this dedicated tent is the major change. In the previous World Cup, he noted, matches were only shown in bars with less seating capacity and a less exciting atmosphere. It will also have a brand new football snack menu made just for the World Cup, and even has a special ‘Russian favourites’ food section, with perogis and other classics, to keep in line with the theme of Russia as a host nation.

Gobeil’s hotel is one of the many venues that didn’t have a dedicated fan area last time around during the World Cup in 2014.

“Last time, we didn’t have a dedicated World Cup tent, however we received great interest from football fans watching the games, so this is something we have decided to launch this year, and we are very excited about it,” Gobeil added.

Outlets are also going the way of special offers in order to woo more customers to their venues. Gobeil has put together special menus that include sharing platters, food & beverage combo packages and drink specials. “Our tent is sitting on the magnificent marina and has huge big screens,” he said. “I am also working on organising raffle draws with daily giveaways.”

For now, it appears the World Cup has scored more goals than Germany this year for the region’s F&B sector.