By Staff Writer
With 18 of the most raved about restaurants, bars and nightclubs in Dubai and Beirut, Addmind CEO Tony Habre reveals what it takes to put on a top performance.
Tony Habre might be the mastermind behind some of the Middle East’s most glamorous hospitality venues, but his humble office in Business Bay — where he insists all the magic happens — is anything but glitzy. Sitting amid unboxed storage units and folder cabinets, he is dressed in a plain blue polo shirt and worn out jeans.
“Unlike what some people might think, you need to work harder in this industry because you have to work the nights and the days; it’s not only working the nights — at least until you can afford to have people work your days or nights for you,” he says, laughing.
A self-proclaimed “sociable guy”, the 37-year-old Lebanese heads concept creation and food and beverage management company Addmind, which he launched in Lebanon in 2004 and then expanded to the UAE in 2013.
The firm currently operates 18 concepts in both countries, built on the experience of its founder. Having graduated with a business management degree at a time when Lebanon offered few recruitment opportunities, Habre turned to entrepreneurship aged 23, with the opening of nightclub Pulse in Downtown Beirut.
“In Lebanon, most people travel to work outside. Having a job in Lebanon after university is very, very low-paid,” Habre says. “And it’s a very entrepreneurial country in terms of operational cost; it’s easy to open something and costs way less than other countries. So the idea was to open something instead of travelling. [The food and beverage industry] was the obvious choice for me due to the events I used to do, due to [the fact that] I love music, I love people,” he says.
Starting a business in Lebanon can be an unpredictable journey, Habre says.
“It costs $1,800 to open a business in Lebanon without the legal fees. And, usually, you have a cousin who’s a lawyer. If not, you can pay a normal royalty of $1,000. Moreover, Lebanon is a very family-oriented country where there’s a cousin of yours, someone you know, that works somewhere you need,” he explains.
“While the banks in 2001 weren’t that easy in giving loans, the suppliers are Lebanese people who know how to work with each other, like in any small country. That’s the positive side of entrepreneurship in Lebanon.
“The negative side is there’s a lack of professionalism and proper advice and consultancy. Back then, it was very hard. I had changed maybe ten auditors in five years because the taxes changed. Auditing and keeping your books is one of the most important things; they can ruin you if you don’t do them right. So on that level, it’s hard to find the right people. Even the banks don’t give you the right advice.”
With little guidance and almost no experience, the fresh graduate managed to get something right, regardless. Fifteen years later, he runs the hospitality empire that holds renowned mega-rooftop nightclub White, London-concept club Toy Room and newly refurbished club Mad. This time, they each cost a little over $2,000 to launch, with White — Habre’s biggest money maker yet — costing $7m to fit out in Beirut and an additional $5.5m in Dubai.
Alongside the nightclubs, Addmind holds restaurants and lounges Boulevard Beirut, Sea Salt, Boubouffe Lebanese Brasseries, Popolo, Iris, Indie, Urban, Caprice and Shogun, as well as beach clubs Bonita Bay and Madame Blue and catering firm Cooks & Trays.
To add to the list, the Lebanese mogul is launching a casual dining Italian restaurant called Matto in Dubai in 2017, because “you don’t need to eat with AED1,000 to have good food”.
“All over the world, the best places are not that expensive anymore. We’re going to hit the market where any person can spend AED300 but have the service and the quality of an outlet where you usually pay AED700,” he says.
“And now since Dubai is going down a little bit, rent is getting better. Everyone is getting to know that, hey, we need to solve that issue. The customers can’t pay AED800 anymore. That’s what happened all over the world in major cities. Few people now spend $200 a head in New York or London,” Habre says.
The serial entrepreneur had first set his eyes on Dubai in line with its large Lebanese population consisting of 95,000 nationals in Dubai and 50,000 in Abu Dhabi. Little did he know it would act as a stepping stone.
“In some way, Dubai is a different Lebanon. It’s a country where we can compete easily with the Europeans because we speak the Arabic language. So after Dubai, I can go to London. But I can’t go to London before Dubai. Because after working in Dubai, you can work in any international city. You’re competing with big brands and those brands you grew up hearing about and travelling to go check out. So moving forward with time, we’re not scared anymore to go operate outside the Middle East,” he says.
And rightfully so. Habre saw Addmind’s revenue double in 2014 and grow another 25 percent in 2015, although it is expected to slow in 2016.
But while Dubai has been good for Addmind’s cash flow — making up 65 percent of total company revenues — operating in the emirate comes with its own set of challenges.
“The operation cost, the rents, the staff, the accommodation - to start a business in Dubai, the barrier to entry is huge - to any business, I imagine, but mainly to ours. There’s no black and white. Our business is already risky. It’s not the most straight forward business. Whatever you do, you will still be at risk. So in Dubai your risk, considering the money, is very, very high,” Habre says.
While Beirut’s nightlife is more established than Dubai’s, Habre says the emirate has a different maturity due to its cosmopolitan state.
“There are no rules in Dubai. We do things in Dubai that we would never do in Beirut because it will not work and it will hurt the reputation,” Habre says. “[In Dubai], because it’s cosmopolitan and an international city, the crowd is so big that it’s not really microscopic what you do. In Beirut, you’re working in the same local market for the same people for such a long time that you are the talk of the town. Nightlife is something that people really talk about all the time. It’s like politics,” he says.
The entertainment guru received a taste of the politics of nightlife first hand when between 2001 and 2006 he launched and consequently shut down five concepts mainly due to instability and conflict in the country.
His response to the setback? Moving past it.
“Look, when you’re living in Lebanon, you’re used to living like that. And I’ve lived in Lebanon all my life. I think every country has a problem. This one is expensive, this one has a natural disaster, the other one has a political issue, the other one safety; each country has an issue,” he says.
“In Lebanon, of course, it’s the political instability, but the positive side is that half of the tourists are Lebanese expats and the Lebanese expats, no matter what happens in Lebanon, will come visit their family and their homeland so the tourism will stay and the local market is ridiculously strong because no one is affected.
“The average person in Lebanon goes out four times a week. They don’t care about what’s happening [politically], they’re very resilient mainly in nightlife. So you get used to it. And your costs are much lower than any other country, so when something happens and you have kind of a cash cushion or something, you can wave it a bit. What annoys you is that it doesn’t have to be that way. That’s what’s annoying. The political stuff also makes the areas unstable.”
Habre says Dubai is far less volatile when newcomers enter the market. If, for example, Dubai Marina is doing well and then new restaurants and bars open in neighbouring Jumeirah Lakes Towers (JLT), the Marina will continue to do well. “In Lebanon the geographical specification is very important,” Habre counters.
Despite his positive outlook, the nightlife market may not be particularly resilient to factors such as lowering oil prices and an overall slow global economy. Addmind’s growth rate is expected to fall to about 15 percent in 2016 as the financial downturn adds extra pressure. But Habre says the reduced growth will be largely felt in Beirut.
“Half of the population of Beirut works for the GCC. You definitely feel it much more in Lebanon. You feel it in Dubai, but not that much. Big spenders, the people that are spending a lot, they don’t really get affected that much. Even if their business goes lower, their spending can still remain at a certain level here,” he says.
The concern in Dubai lies less in market conditions and more in the market players, he says.
“The competition is fierce. There’s a lot of people, because everyone in any business thinks he can go to food and beverage. It looks much easier than it is. The problem is that in major cities such as New York, out of ten places that open, eight close. And it’s going to start to happen in Dubai,” Habre says.
Regardless of heavy competition in Dubai, Habre is well-prepared and fearless. He has had a lot of practice.
“I think working in Lebanon was a huge advantage because competition in Lebanon is tremendous. You’re always on your toes. We’re very much used to competition. And competition in Lebanon is more conceptual, more than money, more than investment. There is the decoration and there is the investment, but it’s more about the concept, the people, the trends, what’s new, how to do it, entertainment, DJs etc. It’s a business of talent, not a business of investment,” he says.
“And because Lebanon is an entrepreneurial country, any 23-year-old, like me before, can come to the market with not a considerable amount of money and open a competing place. So competition can be much stronger because it’s easier, the money’s lower. So, one, we’re used to it, and second, we’re not your usual investors company. All the [general managers] of the company have been in the company for more than ten years; they’ve been there since the birth of White, the birth of Iris, the birth of Indie, the birth of Addmind. We know the business very well and we are from the industry. I grew up in this industry. I only worked in this industry. I know most of the people in it.”
For a self-proclaimed “social guy”, we cannot imagine it was too difficult to build a large-scale network over 15 years to fill a few nightclubs. But the Lebanese guru’s instinct to survive and thrive in the midst of war-led challenges and concept failures makes his success story just a cut above the rest.
“We never had time to be motivated. Until today, we thank God we have grown almost 10 times more since we started,” Habre says.
“But we always come and go to work; that’s the concept of the company. Whether we have two outlets or 18, we don’t really have the time to enjoy or not to enjoy work. We just come to work. No time to be demotivated.”