Dubai restaurants say they're losing money by being open
F&B groups have sent a letter to the government asking for help
Dubai authorities have opted to allow restaurants to reopen their doors for dine-in services, under the stipulation they operate at 30% capacity and uphold social distancing measures.
But restaurateurs say they’d rather stay closed during the pandemic, according to our sister title Arabian Business.
According to a letter seen by the title, signed by more than 100 industry leaders including Marriott, Tim Hortons, Sunset Hospitality and Solutions Leisure, restaurants are struggling to manage rent and salary obligations amid COVID-19 restrictions.
"The F&B sector was hit first and hit hardest due to social distancing. Fear of the virus and the long-term need for physical distancing will mean that most restaurant and café businesses will not have sufficient income to cover monthly expenses to reopen,” reads the letter addressing Secretary General of the Executive Council of Dubai, Abdulla Mohammed Al Basti.
"We must inform you that in fact, it would be more damaging to open for business now thereby losing more money with rent and employee liabilities than to choose to remain closed. That is what all restaurateurs are faced with especially when landlords are trying to force full rental payment liability with the implementation of stage 1 of the reopening plan announced,” it says, urging the government to “intervene and find a solution together”.
The restaurants added that they are losing upwards of AED1 billion a month in salaries, housing and benefits. With rent on top of that adding up to AED1 million a year.
“This level of liability is not sustainable without assistance. We will remain loss-making for many months after the lockdown is lifted and be the last to get back to any kind of normal because of the expected social distancing enforcement guidelines,” the letter says, requesting for new legislation to help during the crisis.
The restaurants, which are part of the Middle East Restaurant Association (MERA) have requested the following:
• Extend the relief to freeze facility/loan repayments with no added penalty or interest incurred for the rest of 2020.
• Reduce fees charged by aggregators to restaurants.
• Existing licences to be automatically extended through to end March 2021 for a year at no charge.
• Waiver of the tax charged on the purchase of licensed beverages up to the year-end once restaurants are allowed to open for business again.
• Restaurant operators to be allowed to keep the full municipality tax charged to customers of 7% for the remainder of the year.
"We need your support to assist businesses to reopen and stay open and to keep as many of the employees living and working in Dubai as possible,” the letter concludes.