Food and beverage grows in importance

Pan-roasted lobster serverd black truffles at CUT, which opens in The Address Downtown Dubai

ARABIAN Hotel Investment Conference (Ahic) 2014 will be looking at solutions to fill in the gaps in the hotel food and beverage (F&B) market in the region.

As the Middle East is becoming the global benchmark for hotel food and beverage, Ahic this year has dedicated a special panel session titled “the evolution of hotel F&B in the region – where to next?” to discuss what value are hotel operators adding, how are they competing and where is it now headed. The session will also look at where owners need to invest to ensure they are able to compete, and what impact can F&B have on average daily rate and revenue per available room.

The session will be moderated by Mary Gostelow, editor, Gostelow Report, who will be in conversation with Henning Fries, managing director of hospitality in Al Habtoor Group, Gert Kopera, senior vice-president food and beverage in Jumeirah Group, and Bob Puccini, founder and chief executive officer of Puccini Group.

Commenting on that, Fries said: “Some might argue that for the most part, in the US and Europe, hotels are no longer considered dining destinations and have long been displaced by independent restaurants/venues. Especially in the Middle East and Asia, owners and operators alike are increasingly focused on maintaining and growing turnover from F&B related activities, while at the same time, boosting the reputation and footfall to their hotels.”

He added: “In many instances, hotels are launched through their F&B offerings in the local market first, which then leads to the rooms’ uptake. From an owners’ perspective, choosing the operator will more and more be determined by which F&B competencies and access to restaurant brands the management company can bring to the table and thus enhance owners return.”     

According to STR Global hotel research company, the F&B revenues have roughly grown in relation to the room performance across the markets that are not affected by localised problems. Total F&B accounts for about 37 per cent of revenue across the Middle East, which is pretty much the highest worldwide and it is growing by 5-10 per cent each year. Doha generates more revenue from F&B than room’s revenue.

Puccini commented: “With the ever-growing number of millennial and affluent global travellers, Dubai’s hotel restaurants, with their eclectic makeup of patrons, have the opportunity to win with regards to return on investment (ROI) if conceived correctly. In order for a restaurant to work in Dubai, everything from the concept, to the design, to the operations and to the branding have to tell the same story, the same message, through a cohesive and convincing framework that ultimately fulfils an emotion.”

Other participants in Ahic this year have also highlighted the importance of F&B in the hotel sector in the region. Mark Willis, area vice-president Middle East and Sub-Saharan Africa for the Rezidor Hotel Group said: “A key focus for us this year will be the rejuvenation of our food and beverage services for guests. If you look at the collaboration between food and drink and events, there is a lot of synergy. Last year we launched ‘Experience Meetings’, which is our new meeting and event concept under the Radisson Blu umbrella. A core element of Experience Meetings involves creating a healthier approach to meetings and conferences by providing brain-food that is light and healthy.”

Kees Hartzuiker, CEO of Roya International also commented: “We are constantly reviewing the performance of F&B outlets at the hotels that we oversee. Every situation is different but most certainly third party F&B operators need to be considered – and in general, we find that this strategy generates a far superior ROI compared to a self-managed or operated space. There is no doubt that third-party outlets also tend to have more dynamic offerings, which also assists in establishing the property’s positioning and attracting a larger contingency of the local community. This in turn provides for a richer experience for in-house hotel guests since they get to experience the social elements of the destination that way.”