Event Preview: Bar & Nightlife 2015

It’s a busy market, with the number of hotels and independent F&B outlets springing up. Tourism has been affected by global political situations, but that brings its own set of challenges. In light of that, how do bar managers stay ahead of the competition, continue to increase revenue, and attract guests?

Caterer Middle East gathered five industry experts at Pacha Ibiza Dubai to discuss their thoughts on the market, and help shape the agenda of the October event. These included: Utopia group beverage director Angus McGregor; Whissle Group group bars manager Thomas Gillgren; Fling Bar Services bar manager consultant Andrew Mullins; Hakkasan Middle East & Asia head of wine Olivier Gasselin; and, Media One Hotel nightlife operations manager Motorga Heathcliff.

Staffing

The group agreed that while staffing was a challenge, it had been discussed many times earlier. However, Mullins pointed out that while frontline staff was previously highlighted, there was another related concern.

Mullins explained: “The main issue I’ve had this year is finding skilled bar managers. Finding someone to manage a bar is a disaster in this town. Ideally, we grow people from within but the issue I find with so many places opening up and staff being poached or moving on so quickly, it’s difficult to have them long enough to train them into those positions.”

Gasselin added that the trend to “over pay” for positions has made it difficult for the likes of himself. “You try to retain your best staff but some people pay over the earth and poach everyone,” he added.

The trend isn’t confined to just independent venues or hotels, with the experts saying this was seen across the board.

In addition, no regulation on wages makes it that much more vague.

McGregor said: “There’s always rumours and rumblings on who’s paying what. The biggest knock I see with that is that a lot of people becoming more and more transient with their jobs. They do the opening, realise things are not stable and then are desperately looking for the next thing.”

The number of openings in the market has something to do with that, said Gillgren. “When you have an opening every week there are opportunities, and sometimes the grass is greener on the other side, but most of the time it’s not.”

The region is currently struggling to attract a good calibre of talent from the international market, saying Singapore is being viewed as the next hot property at the moment.

Seasonal work

Related to this is the idea of “seasons” in the industry. In other areas of the world, bar industry hopefuls and seasoned professionals do a few months at a venue in another part of the world. However, due to visa restrictions in this region, it’s not very easy.

McGregor said sometimes venues recruit almost exclusively outside of Dubai, which results in most of them thinking it’s a holiday or a season, and then leave. Gillgren said seasonal work is becoming more and more of a trend. McGregor added: “The bureaucracy in that is still really difficult because there’s no real visa structure in place for seasonal work. Is Dubai set up to cope with this shift?”

The panel unanimously agreed that if there was a provision for “seasonal visas” for perhaps October to April every year, it would help the industry tremendously, with the ability of attracting international skills and knowledge sharing.

Social media and marketing

The bar industry in this region is unique in the sense that, unlike other parts of the world, it is not allowed to market directly to the consumer.

It is commonplace to read or hear ads that talk about “hops” or “grape” or “bubbly”. In that case, the industry has taken to social media and various websites to reach their target market.

While the panellists did not think being ranked very high on websites like TripAdvisor directly led to substantiated profits, they did agree it was of importance to their owners. Gillgren said it was important to take TripAdvisor reviews with a pinch of salt. Heathcliff added that while owners want profits they also want to see positive comments on social media, which they use as a method of benchmarking.

He further said that since there’s no direct ROI from social media, his opinion was that it’s “better to invest in the staff training because training brings better results — good and constant service will end up pleasing both social media and revenue”.

McGregor said he would question the reach of social media. He explained: “If I’m going out I’m not trolling Facebook to see what everyone’s doing in terms of promotions. I see more value in traditional media. There’s so much access to digital media now, it’s almost diluting itself. We do it because we think that having a presence is worthwhile but would I put so much stock in it that I use it in place of traditional advertising? No I wouldn’t.”

Gillgren agreed to a degree but pointed to Whissle Group’s restaurant Claw, which saw footfall coming through after user–generated content on platforms like Instagram.

Mullins agreed that word-of-mouth is still important in the current market.

Licensing

Obviously, another way in which this region’s bar sector differs from others around the world is the need for a majority to be located in hotels for a licence, or in areas “approved” for licences — in Dubai, this would be areas like Pier 7, Dubai International Financial Centre and so on.

However, there have been a few breakout venues which, by virtue of being a third–party lease and having a separate entrance, are considered independent. These also try to lend themselves a more casual air, which marks a change from previously popular hotel bars.

McGregor said: “Traditionally Dubai is a very five-star market and there’s definitely benchmarks they set themselves against, but it’s nice to tone everything back down. It’s a welcome twist to the market that I hope will continue and it would be fantastic to see that continue to a point where it starts encouraging real entrepreneurship from locals to build standalone brands.”

Mullins added: “Yes, there will always be sensitivities but there would be so much more external investment if people could come in, not go through the bureaucracy of hotels and pay the additional 15–25% handling and everything else that comes with it. Look at the UK and worldwide, there are a lot of pop–ups happening. Not necessarily guys who have lots of money but those who want to make something happen on a shoestring. Unless you’ve got a healthy seven-figure number, you can’t set up in Dubai.”

Innovation

Restrictions on what can and cannot be done are also rampant in a highly bureaucratic or corporate structure, and also from the point of view of what the consumers want.

McGregor said that when it comes to drinks innovation, there is a big disparity between what bartenders want to do and what that means for the guest.

“In Dubai, it’s very hard to have a new concept and promote a different way of doing something because if people don’t get [what they are used to], they will say they want it XYZ way. In this market you could probably run a club with a dozen products!”

The panellists agreed that innovation either goes ahead or is curtailed if the investors don’t think it is cost–efficient. McGregor said: “And all of it comes down to: is it suitable to Dubai? And do we want to support it or challenge the status quo?A lot of bartenders tell me they want to do something but they’re not allowed to. And that does come down to corporate structure.”

Gillgren added: “Corporates should be there as a basic structure to support you to be innovative. Because a USP is what makes a place.” Mullins countered: “The problem is if you do try to do something different and it doesn’t immediately make money, there’s pressure from above to go back to the status quo.”

So where is the industry going from here? There is clearly a desire from bartenders to challenge the current standing, make a difference, and make the region stand out as an innovative place in a highly profitable industry.

To interact with these experts and many others from the bar and nightlife sector, attend the forum on October 5, 2015.

Event details:

Caterer Middle East Bar & Nightlife Forum
Date: October 5, 2015
Venue: Grosvenor House, Dubai
Details: www.hoteliermiddleeast.com/conferences/nightlife/
To attend: Contact michael.mcgill@itp.com
For speaking opportunities: Contact louby.maktari@itp.com
For sponsorship opportunities: Contact clayton.rodrigues@itp.com or amanda.stewart@itp.com

Suppliers in focus

During the discussion, the panel spoke about suppliers and their ongoing concerns with the supply chain in the market.

Andrew McGregor from Utopia Group, pointed out that the supply chain charges double than the UK. “Year on year, there’s a price increase irrespective of what’s happening in the rest of the market, 10% minimum. Part of that is because it’s a duopoly. I’m sure everyone around this table would like to see an open market.”

The fact that Abu Dhabi has six suppliers was pointed out by Hakkasan’s Olivier Gasselin, while Media One Hotel’s Motorga Heathcliff said it would be useful to have direct contact with the factories rather than always work with the suppliers.

Whissle Group’s Thomas Gillgren also said that handling fees make it difficult for venues to be profitable because they have to charge a certain extra on top in order to generate revenue.

While Gasselin has to sometimes rely on special imports, he said it was not the ultimate answer. However, he explained: “We are not competitive if we take only portfolio items. For wine it’s definitely a trend, we have a shortage of stock because the two suppliers have reduced the stock drastically in the last few months. If we don’t have our own wines, we have 50 wines out of stock on the menu.”

Mullins suggested that bringing more suppliers in the market would help the entire industry.