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Dynamics of Restaurant Market in Dubai

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UAE’s residents may have clamped down a lot on their non-essential spending during the dark days of the downturn, but certainly not on their dining out expeditions.

People in Dubai want food prepared using original, fresh and healthy ingredients, which also must taste great. Restaurateurs who understand the business and keep their focus customer-centric will do well ultimately.

Locations also matter in opening a restaurant and the recent boom in real estate has seen a huge capacity for expansion in areas such as New Dubai. Also the recent influx of world class mall like Mall Of emirates and Dubai Mall have raised the stakes higher  not to mention the options provided by many of the recently opened hotels. Restaurateurs who have a genuine offer with a product that’s original and which tastes great and at a price that’s fair are doing well.

Restaurants have to have a steady flow of diners in and out daily and can not only depend on weekend business. Tourists also contribute a lot to the revenue and this has been steadily growing compared to the previous years.

UAE’s residents have been much more discrete when it comes to their out of home entertainment options during 2010. In fact, exercising tight control over these expenses is what many were doing to stay within budgets.

A large number of discount sites have grown and these in tie-ups with restaurants offer promotions and coupons which entice the appeal of eating outside which in return can help consumers to remain within budget while not having to give up on of the pleasures of UAE lifestyle.

The most common reasons that restaurants fail are:

  • Not choosing a good location: occupancy rate, visibility, parking, footfall all these matters when choosing location.
  • High rent- you should not pay more than 10% of your annual turnover as rent.
  • Poor choice of menu and concept- serve the needs of the consumer and create something that will be liked by customers.
  • Lack of working capital – have sufficient funds as contingency when estimating the start-up capital.
  • Badly trained staff: Maintaining a happy and well motivated staff goes a long way in running a successful business.
  • Operating procedure: Procedures mean that each person working in the organization dishes out products including service at the same rate and efficiency each and every time.
  • Overspending on equipments and interior: restaurant owners get so carried away with designing the dining room, they use up much needed capital which should have been invested into the production area.

Also restaurants licenses in UAE are to be are regulated by the departments like Department of economic Development, Dubai Municipality and Civil Defense. You would have to keep in mind their requirements while setting up and running it as well. As any violations with them would result in your business getting heavily fined and in some cases shut down.

These are some of the things that you could look into before starting a restaurant and turning it into a lucrative business.

This article is written by Senior Business Consultant, Mr. Riyazeth.

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