Taste the difference – the Middle East food and beverage industry

When it comes to hotel restaurant profits, the Middle East far outperforms the Western competition. Food and beverage (F&B) generates 37% of hotel revenues in the region - a figure that is increasing by 5-10% each year. The total cost of servicing is also distinctly lower - just 59% of revenue in Dubai, compared with almost 75% in Europe. The result is greater margins on higher volumes of income for Middle Eastern hotel catering services.

The varying performance levels are no doubt a result of widely different attitudes towards F&B. While European and US hoteliers tend to focus on room quality and location, Middle Eastern operators often put dining facilities at the centre of business strategies.

Henning Fries, managing director of hospitality at Al Habtoor Group, goes even further. In his eyes, European and US hotels have long been displaced by independent restaurants and are not seen as dining destinations. In the Middle East and Asia, on the other hand, owners and operators are increasingly focusing on using F&B activities to boost turnover and grow hotels' reputations and footfall.

"In many instances, hotels are launched through their F&B offerings in the local market first, which then leads to the rooms' uptake," he told Hotelier Middle East in a recent interview. "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."

A new division

The intense focus on catering in the Middle East's hospitality sector is epitomised by the Jumeirah Group's recent launch of a restaurant and bars (RnB) division. Unveiled at the group's annual F&B conference in September 2013, the new arm of the organisation intends to take catering operations to a whole new level; creating restaurants that can function as stand-alone outlets or within hotels managed by other operators, as well as for its own properties. The ultimate aim is to create restaurant brands that can compete with established high street names.

"Restaurants are no longer an amenity to a hotel. They actually create the ambience, they are the face of the hotel," observed Gert Kopera, Jumeirah Group senior vice-president RnB, upon its launch.

"The reason why we created RnB and went away from F&B is simple; because, our focus is on restaurants and bars. It's a restaurant experience, a bar experience, it's not just serving food and beverage; there is a distinct difference".

"Our mission statement is to create and operate highly innovative, desirable, market-driven restaurants and bars maximising revenues and profits to establish Jumeirah Group internationally as a leading operator of successful restaurants and bars," adds Jason Myers, managing director of Jumeirah Restaurants and general manager of Jumeirah Group.

Though unwilling to give away details, Kopera hints that Tortuga - a Mexican restaurant in the Madinat Jumeirah resort in Dubai - could be one of the offerings the group develops into an international stand-alone brand. Jumeirah already has a strong track record in creating successful restaurant brands; The Noodle House now operates in 23 outlets, with more due to open soon.

Reaping the awards

The buoyant Middle Eastern F&B sector is also dependant on the immense variety and quality of its restaurants to attract international and local custom.

At Time Out's Dubai Restaurant Awards 2014, hotel eateries performed particularly well, impressing across a range of categories. Best French restaurant went to Reflets by Pierre Gagnaire at InterContinental's Festival City, best Indian to Armani/Amal at the Armani Hotel Dubai and best European to The Ivy at Jumeirah Emirates Towers.

Perhaps most significantly though, two hotel restaurants were also highly commended for the best newcomer category: Izel, a Latina restaurant and one of the signature dining spots at Conrad Dubai, and Yuan, an elegant Chinese at Atlantis, The Palm. First prize went to Qbara, a Middle Eastern fusion restaurant at the Wafi shopping mall.

Along with the diversity of food available, Dubai's F&B sector continues to invest in importing established talent. Stephanie Glacier, the Meilleur Ouvrier de France in 2000 and world champion pastry chef, has recently opened C&E, Cakery & Epicerie, by Stéphane Glacier at the Palm Jumeirah. Jason Atherton is also returning to Dubai. Having first garnered international acclaim as executive chef at Verre by Gordon Ramsay at the Hilton Dubai Creek at the beginning of the last decade, Atherton has since gone on to establish an empire of his own, and will open his first restaurant in the Middle East this year at the InterContinental Dubai Marina.

With so much energy going into Middle Eastern F&B, it seems unsurprising that the general mood within the hospitality sector is largely optimistic about the region's future. Bob Puccini, founder and chief executive officer of the Puccini Group, has commented that "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 if conceived correctly".

Mark Willis, area vice-president Middle East and sub-Saharan Africa for the Rezidor Hotel Group, has also said that the rejuvenation of food and beverage services for guests will be "a key focus for us this year".

Rezidor is certainly not alone. Already the strongest F&B sector in the international hotel market, with a plethora of high-profile openings confirmed over the months ahead and competition fierce, ambitious Middle Eastern hoteliers' appetites are only going to grow.