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"Expo year; we are bullish about restaurant business"
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Monday, 15 February, 2016, 08 : 00 AM [IST]
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fiogf49gjkf0d fiogf49gjkf0d  Vie Hospitality Pvt. Ltd is a Mumbai-based company, operating in the hospitality industry since 1947. The company has set up numerous hotels and restaurant brands all over the globe. Revival Indian Thali restaurants are known for unlimited servings, with over 900 dishes per month and 30 items served on the thali menu everyday. Kamlesh Barot, director, VIE Hospitality, in an email interaction with Anurag More spoke about restaurant business in Gulf countries, his company and more. Excerpts:
How big is the restaurant business in Gulf countries?
As per Euromonitor, UAE's F&B market size is $11.7 billion till 2015 end that has grown by 5% over 2013 and 2014, compared to India which has a CAGR of 11% arriving at $78 billion by 2018 end, out of which 70% is unorganised, leaving the organised sector at $28 billion.
The UAE's F&B market with last year's transactions totalled 844 million for 14,200 outlets, spending $13.84 per transaction. Some 70% of the F&B in 2014 was full service restaurants, while 22% comprise QSRs and 8% cafes etc.
How do you see restaurant business by 2020?
2020 - being the UAE 2020 Expo Dubai year, we are very bullish about the restaurant business cause of the 25 million expected visitors for the expo 2020.
What are the consumption patterns you have witnessed in Gulf countries?
We've observed that the consumption patterns in Gulf countries are majorly dictated by the expat population rather than the domiciles. With 5% growth in population there is a thrust of 67% of it happening at the 18 to 44 age group, with 11% growth from 2009 to 2014 of tourists and 9.3% increase in consumer expenditure in the same period, based on the annual disposable income of a household being $145,000 in 2014. Due to this phenomenon casual dining, QSRs, food courts and cafe are the main formats customers frequent compared to a third of them visiting fine dining.
Some 69% Asian expat patrons in the UAE, aggregate almost 50% of food consumed regularly by them being Indian and 26% Pakistani, 17% Chinese, 11% Lebanese, 8% Italian and American but only 2% Japanese and local Arabic. 66% eat dinner out at least once a week, 75% eat out on one occasion every weekend, while 60% take away once a week, 2.5 times being mostly dinners. Dubaites prefer cuisine, service, variety, location and ambience over cost, alcohol or sheesha being available, not minding travel of nearly half an hour too and spending AED50-100 per person, per meal.
How are the government regulations with regard to setting up restaurant in the region?
I was amazed to get my restaurant operation licence by post in a week's time after applying! Having put in 40 years majorly setting up hotels and restaurants in India, it seems like a restaurant show-stopper. Regulations for staff visas in USA are comparatively simpler compared to our experience in Australia and Vietnam, now in USA and the UK being underway. Municipal (Baldiya) regulations are one of the strictest we've come across so far in the East. Forex regulations are the least compared to anywhere else we've put up our outlets.
What are the trends that you have witnessed in the region?
There is continuous positive growth in the region, albeit a tad slower than India.
What are the challenges faced by the industry in Gulf countries?
Being a free-trade zone, there are hardly any challenges that we face in our industry in Gulf countries. The only requirement lacking is a pro-active association like HRAWI or FHRAI there.
Brief us about your restaurants in Gulf countries.
We started the Rajdhani Thali restaurant in Dubai and Muscat way back in 2009, currently our Revival restaurant is functioning very close to our old location in Bur Dubai, Rolla Street, serving north Indian, breakfast and hi-tea chaat snacks as well as Revival Indian Thali.
Tell us something about your expansion plans.
We're expanding in the Middle-East, USA, the UK and of course India.
How much will you be investing in it and how are you raising the funds?
We're investing as per the formats depending upon our branch or franchise option, raising funds internally as well as through equity partners.
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