Exclusive: 40% F&B outlets closed permanently in 2020

January 24, 2021 | By Shruthi Nair

Dubai announced the suspension of entertainment activities at restaurants and hotels last week on account of the growing number of Covid-19 cases in the country and violations of guidelines at venues.

The move could have a drastic impact on the F&B sector that is slowly recovering from the lockdown and closures in 2020.

“The market has seen 40% closures amongst the F&B businesses over the pandemic period which lasted a major part of the year 2020. A lot of the hotels did open their accommodation– but not all the F&B outlets within their premises were opened”, said Naim Maadad, Chief Executive and Founder of Gates Hospitality.

According to a report by JLL last year, restaurateurs in the Middle East experienced an annual decline in in-store sales of -55% for the month of March and expected it to drop to -77% drop during the month of April last year.

However, despite the closure of many restaurants across the city, which has one of the highest restaurant footprints per million residents, second only to Paris, there have been some commendable strides.

“There have been a lot of new openings in the restaurant sector during this period. As the market opened up since the peak of the pandemic, there were a lot of projects which were already in the initial stages before the pandemic put things out of gear. This was for some by choice and for others because they had no other options”, he said.

Dubai restaurants and hotels suspend entertainment activities

The new directive from the government and Department of Tourism and Commerce Marketing (DTCM) – although clear – has created some confusion among operators when it was announced. The only solution at this point would be to act responsible and follow the guidelines put in place so the industry can go back to doing business as usual soon.

“Our contingency plan would certainly be to strictly abide by the rules and regulations stipulated in the directives and keep an eager watch on any updates coming in future.  It is the stage of the pandemic when all should be prepared for a long-term strategy for recovery on a permanent basis rather than rush for short-cuts to gain short term benefits putting the business to risk”, he concluded.







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