The restaurant business is a booming one, be it anywhere in the world. Contrary to popular belief, it requires passion and dedicated hours of personal involvement and yet, success is relative, depending on the way things are managed right down to the smallest detail. To begin anything, I feel the initial steps are the most important. Firstly, it is absolutely essential to have a proper market survey to determine the trends that are prevalent at that time in the region. It always helps to know who the prospective competitors are and what they are doing to set them apart. The next step I feel would be to chalk down the basic idea and concept behind the restaurant you are planning to launch. This goes for launching a restaurant anywhere in the world.
With the discovery of oil in the Gulf Coast and its surrounding regions, the Middle-East has come to become a prosperous region. Not only does it boast of the highest concentration of millionaires in the world, with that wealth, there is also a penchant to indulge in everything luxurious, including hotels and restaurants. So much so, that according to some reports, dining out in the Middle-East ranges from as frequent as three to four times in some parts.
Leadership position
The Middle-East, today, is being considered as the land of restaurant opportunity. With government investments, the Middle-East hospitality space is booming at a substantial pace, faster than anywhere else in the world. Abu Dhabi is counted as the richest city in the world, Dubai the fastest growing; Kuwait is building the Silk City with an approximate area of 250 sq. km and the Kingdom of Saudi Arabia with the King Abdullah City, the largest private investment project pegged to be three times the size of Manhattan. Some have even compared the hospitality potential of the Middle-East to that of China and India. China is regarded as a leader in manufacturing growth and India being the undisputed global leader in information technology and outsourcing, the Middle-East is set to take its leadership position in the field of hospitality and tourism growth.
The Gulf, currently, is a very interesting and challenging region for a new restaurant. According to the latest statistics, the hospitality industry in the Gulf Cooperation Council (GCC) countries, which include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, is expected to grow to $35.9 billion by 2018 from $22.8 billion in 2013, which makes a compound annual growth rate (CAGR) of 10 per cent between 2013 and 2018. The high rate would be owing to the shift in the global activity from the West to the East along with various other resultant changes expected in the coming years. Based on these stats, the Gulf is definitely the place to invest in, as the hospitality industry, including F&B retail, is expected to grow at a rapid pace.
Exponential growth
The challenge however lies in the operational aspects of these establishments. While there has been exponential growth in the region over the past decade, with ample opportunities for everyone to even begin listing them, the region barely has production of its own. This largely means that everything needs to be imported, and therefore the need for a strong food industry infrastructure to support these new luxurious cities and the continuously increasing demand for the hospitality industry.
Another interesting facet to note is that, the food and beverage industry in the region is currently dominated by franchises owing to various regulations, but the SME-friendly business underlines opportunity for development of home-grown concepts and promoting ‘local food’ techniques and recipes. Moreover, the catering business for cruise, events, institutions and industries presents an opportunity for culinary entrepreneurs. Starting up a business in the Gulf is relatively easy since the government is highly supportive. In fact, World Bank’s 2016 Doing Business Report, Reforming through Difficult Times, ranks the United Arab Emirates as 60th on the overall ease of doing business, out of 183 economies worldwide. That said and done, the major issue that is faced to start up a restaurant business, particularly in Dubai, is the process of licensing and certification. The process is long and complicated; the licensing requirements are rather strenuous, with frequent changes in the rules and regulations without prior notice.
Investment, workforce
Starting up a casual-fine dine restaurant concept requires requisite investment, in not just the culinary foundation of the establishment, but also in its ambience and international standards of service that provides exclusivity and personalised culinary experiences. These are most commonly being driven by major hotel chains and by signature restaurants of renowned chefs from various parts of the world in its current environment. Therefore, another challenge hospitality establishments face is the lack of and easy accessibility to qualified labour. It is extremely important to have qualified and experienced workforce to uphold the standards expected as well as delivery near perfection product to the end- consumers.
While setting up any kind of business in the region, particularly Dubai, there are certain regulations foreign investors need to adhere to. The first and foremost being that the business needs to be in partnership with a local, who would hold majority interest in the business; owning 51 per cent of the business. For foreign investors who are looking at 100 per cent ownership, they can do so in the free trade zones. In the restaurant business with the location being of prime importance, among other considerations, that is not an option as these zones are located quite far from the main hub / city centre and hence will prove difficult to reach out to the entire audience base. Moreover, for foreign investors, it is advisable to have a local registration consultant who would be able to guide you through the process of applying for licences and certifications.
Innovation is key for restaurants to sustain leadership position in the market and prove successful in the long run. It is therefore essential for establishments to continuously invest in training and exposure of their core personnel towards international trends, while ensuring that the basic fundamentals on which the restaurant is established are not compromised. We at Massive Restaurants Pvt. Ltd (MRPL) firmly believe in this principle and try our best to strike a balance between the traditional and modern, innovating continuously to bring in engaging culinary experiences for our patrons, without losing on the traditional essence of the cuisine we serve through our various restaurant concepts.
Currently, we have four restaurants under the Massive Restaurants Group, namely Masala Library by Jiggs Kalra which is our flagship, premium, fine dine concept serving progressive Indian cuisine and is the magnum-opus of The Czar of Indian Cuisine – Jiggs Kalra; Made in Punjab, a fun, smart-casual traditional Punjabi cuisine concept; the critically acclaimed Farzi Café which is soon being launched in Dubai as well; and Pa Pa Ya, a high energy, modern pan-Asian dining concept. We are also in the process of launching a new, nightlife concept with its flagship coming up in Mumbai offering a breathtaking view of the Arabian Sea and an experience unlike any other.
