I think 2021 will be great


September 14, 2020 | By Rupkatha B

“I think 2021 will be great,” opines Antonio Gonzalez, CEO, Sunset Hospitality Group. “The UAE is uniquely positioned to overcome the COVID-19 faster and better than several other parts of the world, owing to our great leaders and their initiatives. We will leave the worse behind very soon.”

Overall, the pandemic has taught every sector, including retail, to plan for the best but prepare for the worst. Despite all the challenges, Gonzalez is optimistic. “We will continue to bring people together, creating great moments for them. The social component around dining will always be relevant.”

The big question, however, is if the food and beverage (F&B) industry is on the road to recovery yet.

“It is difficult to say if the F&B industry, as a whole, is on the road to recovery,” Gonzalez responds. “There is a big divide between transactional and experiential concepts. The former will continue to grow by leveraging technology to constantly improvise the delivery model, offering great services and convenience, attractive pricing and good quality, as this market segment is becoming more competitive. While the revival of the experiential segment will depend on the availability of a vaccine that will help in raising the confidence of people to get together again.”

“Having said that, we haven’t seen much of a shift in the spending pattern or social behaviour of our audience,” he clarifies. “The experiential segment, from what we see in our business, has continued to evolve in a similar manner as pre-COVID, of course, there was a brief pause for a couple of months. At the same time, the desire to get the highest value for money has become more pronounced among consumers, even as they seek a delightful social experience around dining.”

Even within the experiential dining segment, people may not be eating out as frequently as before amid several factors including a possible reduction in salaries and driven by a sheer cautious sentiment.

“Currently we are going through a strange cycle in the UAE,” Gonzalez observes. “A majority of our concepts mainly draw the resident population, a segment that tends to travel during the summer months. It was different this year, wherein most of them didn’t travel. When we reopened the doors of our restaurants towards the end of May, some of them actually recorded better numbers compared to the same period in 2019. We were pleasantly surprised. In effect, residents overcompensated as we have lost a significant portion of the tourist population.”

For instance, Italian restaurant Luigia under Sunset Hospitality Group performed “exceptionally” well. Luigia heavily draws the Italian resident population in the UAE, majority of whom didn’t travel this summer. As a result, Luigia clocked over 20% growth since the restaurant reopened until July, compared to the same period last year. “When our loyal diners measured Luigia’s value for money proposition against the high-quality food and excellent customer service, they returned to dine with us multiple times, since we reopened. At the same time, we were able to attract new diners,” Gonzalez elaborates. “We have always been careful about setting our margins correctly, to be able to adjust our pricing accordingly. During the past few months, what we did differently is create some smart activations to offer the best value to our diners at Luigia.”

American restaurant brand Black Tap, also under Sunset Hospitality Group, has performed well too. “It is already an established and much-loved brand in the UAE,” Gonzalez believes. In the case of Black Tap, the like-for-like growth at the existing branches – including Dubai Festival City, Jumeirah Al Naseem and Jumeirah Beach Residence – was down by around 5% compared to last year. This could be, in part, due to the Dubai Festival City branch that’s yet to reopen. However, the overall performance of all the Black Tap restaurants – including the new one at The Dubai Mall – is positive over last year. The Sunset Hospitality Group is currently waiting to open the newest branch of Black Tap at Mall of the Emirates by the second week of October.

In fact, Sunset Hospitality Group has launched Black Tap in Erbil and plans to soon open a branch in Saudi Arabia at Riyadh’s financial district by the first quarter of 2021. “We are also planning to take Luigia to KSA in 2021. We will open Ammos Greek and Azure Beach Club in Qatar by end of this year. We will open Cloud at the Studio One Hotel in Dubai Studio City, LOLA at TRYP by Wyndham Barsha Heights, reopen the shisha lounge Mood Rooftop Lounge at the Meydan Hotel soon. We are also working to launch a few more exciting projects in the UAE,” Gonzalez shares.

That’s an exciting pipeline, especially amid the on-going pandemic. “That’s why, I think 2021 will be great,” Gonzalez emphasises.

“But we have also had to undertake some readjustments. We have had to close down Sweet Chick that we introduced in Central London in 2019, owing to negative cash flow. We also had to delay the launch of some projects, including SUSHISAMBA and Aura Skypool at The Palm Tower, until September 2021. These projects will require a revival of tourism and the general economy. We have had to also renegotiate contracts with landlords, who were quite supportive. Our suppliers and team members have also been incredibly supportive and loyal all through this difficult period. It’s for such great relationships that we are optimistic about closing 2020 with solid profits, despite incurring heavy losses, especially during the lockdown,” he concludes.

 

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