Tough times face new hotel outlets
They keep opening but can they succeed?
The current economic climate might be making some hoteliers nervous, but it has not prevented a raft of outlet openings over the past few months — plus numerous announcements of more to come.
Despite the obvious disadvantages for new players entering the Middle Eastern market right now, many outlet operators remain optimistic about the success of their new offerings.
Last month saw the relaunch of the newly-decorated Mughlai restaurant Rasoi at Coral Deira, Dubai, which — according to Wael Elbehi, regional sales director for Hospitality Management Holdings (HMH) and Coral Deira — has received "a wonderful response".
"It's because Rasoi is a unique product, being the only museum restaurant in the Middle East," he added.
However Elbehi admitted it wasn't all plain sailing.
"The F&B business has been affected like everything else, owing to the current economic situation," he said.
At Sheraton Dubai Creek Hotel and Towers, which recently re-opened its Creekside outlet after a six-month refurbishment, deputy general manager Antony Wade has noted a variety of issues facing re-opening outlets.
"One of the challenges is attracting customers back to the restaurant after a long renovation and of course, due to the soft economic climate. There is a lot of uncertainty this year, which has resulted in people being careful of their expenditure, how much they spend and where they spend," he pointed out.
"A natural reaction from the market is to offer special deals and discounts to attract customers, hence the need for us to remain competitive in terms of pricing, product and value.
"But the most challenging thing here is the pricing; we have to balance the price carefully in order to get the return on investment for what we’ve spent on the renovation," he said.
New outlets face a similar challenge of finding some way of attracting — and most importantly retaining — business.
Al Bustan Palace InterContinental Muscat recently opened its new signature restaurant, VUE by Shannon Bennett – the acclaimed chef's first venture outside Australia.
According to the recently-refurbished property's F&B director Didier Belmonte, the secret of success for outlets opening at the moment is to offer something unique.
"We have found that in the current market, uniqueness is a draw," he explained.
"The clientele is curious to know what is so special about this restaurant and how it is different from other fine dining institutions in Muscat."
Dusit Residence Dubai Marina food and beverage manager Jordan Chong agreed individuality was a must in today's increasingly competitive climate and explained that the new property would endeavour to "create a niche" for itself in the F&B market place.
Despite the optimism driving many new restaurants, operators must be aware that new openings will necessarily generate interest; the real challenge is retaining business after the initial curiosity has worn off.
Maintaining an up-to-date menu was also key to encouraging repeat business, noted Al Bustan’s Belmonte.
"Quality and consistency of our unique food concept lies at the essence of the success of the restaurant, as word-of-mouth plays an extremely important role in continuous marketing," he pointed out.
"We are continuously creating new dishes to maintain the surprise element in the experience."
HMH’s Elbehi also cited promotions in conjuntion with "a well-defined marketing and PR strategy" as key components for a successful launch.
And offering top value should not be the only benefit for customers, according to Sheraton’s Wade.
"We understand the importance of having our customers feel at home...building close relationships with customers is key," he asserted.
But will such proactive measures be enough to keep new outlets — particularly expensive fine dining concepts — afloat in a market reaching saturation point that is witnessing a tangible downturn in consumer spending?
Although VUE by Shannon Bennett offers an undeniably high-end dining experience, Al Bustan’s Belmonte said he believed the "unique experience" on offer would be enough to secure long-term interest.
"The Al Bustan Palace InterContinental Muscat attracts a level of clientele which seeks unique and fine dining experiences," he stated. "While people may choose to go less regularly for dinner, their interest still lies in gourmet journey."
The new players are optimistic, but one thing remains clear: new outlets have even more to prove than the old.
Those that recognise the need to adapt to the current climate and think creatively about how to attract business will be the ones who succeed.