‘Overheads, not rent, will kill fine dining’ during Covid-19, says Dubai F&B boss.
Despite calls from Dubai restaurants urging landlords to provide rent relief to help them navigate challenging economic times on the back of the coronavirus pandemic, F&B boss Mansour Bin Jabr says it’s overheads that will affect the industry’s fine dining venues.
A partner at hospitality company 4-Front Facilities, which operates casual concepts like Mr Miyagi’s and Stars N Bars, he says upscale restaurants will face millions in losses over the lockdown period.
“Fine dining… these guys are really hit hard. It’s not the real estate that’s going to kill them. It’s the overheads. Because the real estate, you’re paying AED2-3M and the landlords will say, ‘alright, because of coronavirus, I’m going to give you 25 per cent off and you’re only going to pay AED2 million.’ So it’s not going to affect you much,” Bin Jabr says.
“But what’s going to kill you is when you have highly paid European waiters who you’re paying AED13,000 per month, when I’m only paying AED2,300 a month; it’s not going to hurt me. They’re paying 10 times what I’m paying in monthly salaries, especially when you have a general manager, for example, whose salary is AED80,000. So you’re going to end up paying AED200,000 in 2-3 months and you’re hit hard because you have millions in losses. I don’t see how you can recover from that,” he adds.
Bin Jabr’s venues are currently relying on delivery for revenue, and have seen a 25% increase in deliveries since the lockdown measures were introduced in March. While it’s not enough to sustain the business in the long run, he says the drop in sales will not kill casual dining concepts.
