A multitude of F&B groups in the UAE claim to be losing AED1 billion a month and have asked for rent relief to survive the crisis. Many restaurants claim to be facing severe negative cashflow due to rental obligations and employee liabilities amid strict Covid-19 restrictions which limit their seating capacity to 30 percent in line with social distancing measures.
Restaurants in Dubai are losing more money by being open than by remaining closed, according to a letter signed by over 100 industry leaders including Marriott International, Tim Hortons, Sunset Hospitality and Solutions Leisure – and which account for over 50% of people working in the F&B sector and 10% of the city’s population.
“The F&B sector was hit first and hit hardest due to social distancing. Fear of the virus and the long-term need for physical distancing will mean that most restaurant and café businesses will not have sufficient income to cover monthly expenses to reopen,” reads the letter addressing Secretary General of the Executive Council of Dubai, Abdulla Mohammed Al Basti.
“We must inform you that in fact, it would be more damaging to open for business now thereby losing more money with rent and employee liabilities than to choose to remain closed. That is what all restaurateurs are faced with especially when landlords are trying to force full rental payment liability with the implementation of stage 1 of the reopening plan announced,” it says, urging the government to “intervene and find a solution together”.
“This level of liability is not sustainable without assistance. We will remain loss-making for many months after the lockdown is lifted and be the last to get back to any kind of normal because of the expected social distancing enforcement guidelines,” the letter says, requesting for new legislation to help during the crisis.
