Trends analysis: Hotel F&B in the GCC

1. New market, new guests

Sometimes there really is such a problem as too much choice, with hotel F&B experts predicting that 2016 will see a growing preference among hotel guests for fewer, yet more exciting dining options, rather than being spoilt for choice. As Hilton Worldwide regional director of food & beverage Arabian Peninsula Marc Gicquel puts it: “The time when there were 12-15 outlets in a resort is gone.”

Continuing, he adds: “Ultimately the market dynamics have changed over the last couple of years. We strongly believe that ‘less is more’, and focus on the quality versus the quantity of our outlets.”

Taj Dubai F&B director Niki Robinson agrees, and also believes that hotels’ in-house concepts have “got to be up to muster” due to guests’ demands for quality. Robinson sees the advantage of bringing together a mix of global brands and local, independent concepts in hotels, asserting that this spurs hotels on to “re-think their in-house concepts”.

She explains: “It doesn’t suffice to have a boring all-day dining outlet, it doesn’t suffice to have just a Caesar salad on your pool bar menu. You’ve got to think beyond, especially in this market, there are so many co-existing cultures.” Robinson also makes the point that customers are savvier than ever: “The customer knows more about food and beverage and are more interested than they used to be.”

This is certainly something Gianluca Sparacino, corporate director food & beverage EMEA, Four Seasons Hotels and Resorts, has seen. “The customer profile has really changed. The local customers here have travelled the world. Emirates has opened the world up for everybody. We’re seeing that the people here are avid visitors to London, Paris, New York, and Washington. They’re seeing what is possible outside... and expecting the same to happen in places wherever we operate,” he notes.

Changing customer dynamics goes beyond people’s horizon being broadened though, with Adam Van Den Bussche, senior director of operations F&B, Middle East & Africa, Marriott International and Ritz-Carlton, commenting: “Millennials are the next generation; they are the next customers to bring all the money to us. The millennial mind-set influences the generation preceding them.”

2. Keeping it casual

Smart casual dining has steadily gained popularity in recent years. and even in Michelin-starred restaurants, service is becoming less formal and dress codes more relaxed. One of the many reasons thought to be behind this shift is the fact that going out to eat at a restaurant is no longer a special treat, saved just for birthdays and anniversaries.

Tom Aikens, who recently confirmed he will opening more casual dining restaurants in Dubai, acknowledged this trend last October in conversation with Caterer Middle East. He said: “I wouldn’t want to do anything typically high end [here]. I don’t think there is much appetite for that.”

Van Den Bussche agrees: “Everyone has taken out half of their silver, tablecloth — all the clutter which became the very Swiss style of fine dining. All the big guys with Michelin stars are doing more casual places today.”

One of the advantages of of keeping it casual is the greater likelihood of repeat business, as Gicquel explains.

“You don’t want to attract one person once or twice a year. You want to attract them more regularly and the price has to create repeat customers — not only a one off wedding anniversary or birthday,” he says.

Robinsons sees potential in a compromise falling between casual and fine dining: “Dubai is coming to understand the mid-casual dining now. There’s a glut of amazing stuff sitting within that, it’s not hot towels and jasmine scented teas anymore. It’s a greater focus on the product itself rather than the fanfare that goes around it.”

3. Star power

In an increasingly competitive marketplace, it’s easy to see why hotels vie for the somewhat safer bet of bagging a celebrity chef or big brand name, as opposed to launching a new concept in-house or leasing space to a perhaps unknown independent concept.

This is not a trend that is likely to be going anywhere in 2016, when "there are certain brand names that definitely fill your lobby”, according to Sparacino. He adds that “the aura that great restaurants bring” generates “phenomenal” hotel traffic.

Expanding on this point, Van Den Bussche remarks: “A halo restaurant adds not just to the traffic, but to the perception of the hotel and the room rates. That helps really argue the case for investment. It pushes your RevPAR (revenue per available room), and helps to release the capital to go for the right name.”

There are factors to consider though, not least the nationalities of your hotel guests and nearby residents, as Robinson notes: “If you’re bringing a famous celebrity chef from America, they’re not necessarily particularly well known. But if they’re bringing many American customers with them to their hotel, then it becomes a destination.”

She adds that launching the Marco Pierre White restaurants in Dubai, for example, was “very much a commercial opportunity” but it can be more important to have someone who is eager to market themselves and “very active in social media, without which you die in restaurants”.

4. Balancing act

Whether they go down the route of outsourcing to independents, attracting big name brands, bringing in celebrity chefs or cultivating in-house concepts, hotels — above all — need to make the business successful and provide the ROI that owners are looking for.

Discussing the ongoing challenges of this balancing act and of managing the expectations of hotel owners, Elias Chakhtoura, F&B relay for the Middle East & Egypt, Accor Hotels Luxury & Upscale brands, says there is pressure from owners to maximise space, going against customers’ increasing preference for fewer, and better quality, dining options.

“It doesn’t make sense to have 15 restaurants, but when you have an owner who wants to maximise every space in the hotel, then we look to outsource — but then you need to find the right partner,” he shares.

Agreeing, Hilton Worldwide’s Gicquel comments: “Sometimes owners will say they want 10 restaurants and you come back and say, ‘no we want to have only five restaurants’. That’s an open discussion on figuring out what setup it is.

“We also want to be driving the decisions based on market dynamics, otherwise you will end up with concepts that are empty — not because they are not good concepts, but because they are not the right concepts for that location.”

Sparacino says hoteliers try to provide a great experience for increasingly discerning guests in terms of their F&B offerings, either through third-party operators or in-house, while balancing owner requirements. “It’s easy to get caught up in, ‘oh we saw this great concept, why don’t you bring it here?’ [but] there’s a huge economy involved in bringing these guys [brands and celebrities] in.”

There are challenges in agreeing on price points with the owners for the F&B outlets. Van Den Bussche reports: “There’s always the mind-set here that you’re either the cheapest or the most expensive,; the thing in the middle is what I still struggle to convey to our business partners and owners, mainly that a good value offer which is maybe above average is what will fit the market.”

5. Clean and green

In line with many other industries’ efforts to be more environmentally responsible, Gicquel identifies a key trend in hospitality as being “less is more” is in terms of focusing on “quality over quantity, from pricing to sourcing, to waste”.

Chakhtoura predicts the Middle East market will see “a big focus on food waste, and restaurants and hotels are going to start promoting that like they do sustainability”.

This is certainly true for Marriott International and Ritz-Carlton, with Van Den Bussche revealing: “Our buzzword for 2016 is ‘local’ — supply chain, customers, staff, ideas and network. It stems from the idea is that if your restaurant or bar in the hotel is attracting local customers, then you will by default retain your hotel guests. Go local is a bit of a cliché but it does manage to encapsulate the idea.”

Sparacino shares his thoughts, specifically relating to Dubai: “Dubai is still a fledgling market in food and beverage. They have a lot of brands here, but they’ve imported a lot of it. Dubai will transfer from bringing in to creating. Look at New York or London — slowly Dubai will catch up to that.”

He observes a greater focus on solidifying Dubai’s place on the world stage as a “gastronomic capital”, with part of that involving a greater focus on transparency and traceability in the supply chain. He states: “Globally everyone is in tune with what they’re eating and where it comes from. Provenance, farm to table, whatever you want to call it, it’s not going away anytime soon.”