News Analysis: Food Wars

Why do hotels often look to open established F&B brands whether international partnerships or franchises, rather than grow their own restaurant concepts?

Gordon Ramsay's Bread Street Kitchen in Atlantis. A well-known name can add value.
Gordon Ramsay's Bread Street Kitchen in Atlantis. A well-known name can add value.

International restaurant concepts bring a lot to the table, mainly the full might of a big brand name. Many major hotels in the region have international franchises among their F&B options — Nobu and Bread Street Kitchen in Atlantis, Hakkasan at Jumeirah Emirates Towers and Wagamama at Crowne Plaza, to name a few.

According to RMAL Hospitality operations manager Dani-Jan Gicquel Billington, one of the biggest advantages of franchising is building a brand on a regional or international basis that could already have value in the eyes of customers that the hotel is trying to attract. Overall, working with existing brands rather than growing your own greatly reduces the risk of failure.

Atlantis the Palm vice president culinary, Sascha Triemer, believes that as Dubai is such a melting pot of nationalities in terms of both tourists and residents, an established and well-known F&B brand is also much more likely immediately to resonate with guests from across the markets, ensuring they know what to expect and increasing the chance of the establishment’s success.

“It’s a tough F&B market in Dubai and an established brand has a proven track record that some hotels will find much more desirable than taking a chance on opening their own home-grown concept,” added Triemer.

Selecting a restaurant concept in a hotel is no easy feat. One of the main reasons why hotels look to open franchised restaurants, according to Gates Hospitality chief executive Naim Maadad, is the struggle to stay relevant.

He told Hotelier Middle East: “A hotel project usually takes about four to five years from the concept design board to opening, and this timeframe presents a risk for an F&B brand to remain relevant until the hotel launch.

“To overcome this challenge hotel operators often seek well-established brands. If their own brand is decided, then there is the risk that the concept may not be what the market needs when the hotel project is completed — sustaining the relevance of brand [through pre-opening] is a vital challenge to face. Going with a well-established brand ensures popularity as well as building the vibe around the venue.”

Maadad added that if a brand can take over the existing fit-out and create the restaurant facility with the existing infrastructure in place this will inevitably reduce the time to launch.

But it’s not just about practical considerations. “Hotels also need to consider the type of outlet, what market segment they are aimed at, local demographic of the location, style and brand values. And what function should the restaurant offer within the property?” said Billington, who has worked in his present role with MPW Steakhouse Grill, Frankies, Wheelers of St James, Trader Vics and Wagamama.

New York City’s Black Tap, a brand that is known for its burgers and milkshakes, recently opened its doors at the Jumeirah Al Naseem Hotel in Madinat Jumeirah. And it plans on opening more franchises in the region.

Sunset Group CEO Antonio Gonzalez said: “The essence of Black Tap is its authenticity —this is real food, real messy, for real people and we have been looking forward to opening our doors to the people of the Middle East. Dubai is just the beginning for this brand, as we have ambitious expansion plans across the region.”

“We currently have a number of different outlets within our portfolio across the city, in great hotels such Four Seasons, Hyatt, Westin, Rotana, etc, and it is always helpful to partner with successful hotels, since their guests provide a solid starting point to build clientele. In the case of Black Tap, we have plans in other locations both in and outside hotels. Black Tap is a bit special since it’s a concept that can work both licensed and non-licensed. It is about having the right concept, at the right place, at the right price,” Gonzalez added.

Another question that hoteliers consider before selecting their F&B concept is which option would generate more footfall.

According to Billington: “Of course a well-known name will always add further value to the hotel proposition and facilities, as well as attracting external footfall. Brands are about building trust. They evolve from the reputation you have built and connect in a relevant way to your guests. And let’s face it, people spend more money when and where they feel good.”

Maadad said: “Using a well-established brand is definitely a way to ensure a successful launch and attract initial footfall to the venue. The concept already has a wide acceptance and recognition in the market via a network of brand loyalists and connoisseurs.”

“But what is vital is how we present the concept,” added Maadad, talking from the point of view of launching The Black Lion Public House & Dining as well as the Bistro Des Arts brands successfully.

“The location of the venue decides the strategy — with both these venues, we are not relying on resident guests for the business as the clients are mainly [walk-ins]. But they have become successful due to their prime positioning inside a hotel with direct accessibility,” he said.

Franchising gives some hotels an opportunity to “play it safe” with their F&B selections, which could be wise given the current economic climate. By leasing the space rather than operating these areas themselves, they can improve their chances of success, according to Billington.

“More and more we are seeing hotels sticking to what they do best [rooms]. While many do design and create their own concepts, often the story of the venue/menu is lacking and the creativity or colouring can be bland.”

Maadad said: “Any stakeholder these days would certainly like to play it safe and avoid unnecessary risks involved in a hotel opening. The five-year period is a substantial phase and when the hotel does open, the relevance of the F&B concepts to the market is a point to ponder. Hence it would be recommended to go with well-established concepts with proven success records in terms of relevance to the market and potential client segment.”

But not everyone is convinced that franchise restaurants are the way to go.

Viceroy Palm Jumeirah general manager Mikael Svensson told Hotelier Middle East at the pre-opening walk through of the soon-to-open hotel that it would not franchise any of its F&B outlets. “Our F&B is not going to be a Gordon Ramsay’s or whatever. We don’t want to brand anything for the sake of the name of the restaurant.

“Viceroy is managing all its restaurants independently. We chose Quatro Passi as an outlet because of its authentic Italian food in Nurano, Italy; and because most people wouldn’t know what Quatro Passi is, it gives us an element of surprise.”

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