The year 2020 was marred by a pandemic that most of us were not prepared for nor equipped to deal with. The fallout of the effects were quickly felt across the globe, and 2020 will forever be known as the year that tested every operator in every single market. The F&B industry was no exception, and those who weathered the storm are now looking forward to the coming year with guarded optimism.
While evaluating the current climate and forecasting 2021, it is important to note that there are a variety of factors at play, which include brand strength and unique market response. For example, several well established brands experienced a strong pick up in 2020 and are projected to continue on this upward trend over the coming year. Furthermore, high-end licensed operators in Dubai seem to be performing extremely well despite the external factors.
When it comes to hotel occupancy, the figures look promising. Occupancy has picked up despite less stock, due to a number of hotels remaining closed. There have been indications that some hotels are back to high occupancy rates exceeding 80 percent, although it should be noted that the revenue per available room (revPAR) rate is down. In markets such as KSA, the numbers are currently on par if not higher than what they were pre Covid-19.
In terms of forecasts for 2021, I believe we will continue to see a lot of the weaker brands and operators suffer due to a factors including competition, challenges presented via Covid-19 and a general shortage of cash. Whereas established brands seem to be able to ride the tide, the weaker brands appear to be bearing the brunt of the setbacks as a direct result of the aforementioned points.
It will take more time for concepts in business districts to get back on their feet. Delivery businesses have done marginally well and will continue growing in the coming year. In addition, the dark kitchen trend — if coupled with massive investment — will grow with regards to new players. When analyzing consumer market trends, healthy eating will almost certainly be at the forefront of all new concepts. Consumers are more health conscious than ever before and with government initiatives in place, such as the mandatory posting of calories on menus, there is no doubt that tapping into this segment will be imperative.
On a final note, health and safety measures have never been as critical as they are today. While restaurant health and safety has always been of utmost importance, the additional measures customers now expect have created a new norm for dining out. Operators must take protocols seriously to guarantee that their outlets are functioning at the highest level when it comes to hygiene.
In terms of New Year’s resolutions, we have to assess innovative methods that will allow us to approach things with fresh eyes. Those of us who have endured the worst of it now have a year of veteran-like experience. Many of us were impacted either directly or indirectly by the ripple effects of the pandemic and have had to make adjustments accordingly. Several people across the spectrum have lost their income and/or their livelihood and that will take some time to recover from. The name of the game for the upcoming period will be adaptation, and F&B operators should explore new/alternative opportunities around the F&B sector regionally.
Abdul Kader Saadi,
Managing Director and owner
Glee Hospitality Solutions
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