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Tue 28 Jan 2020 08:52 AM

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Dubai's F&B sector plagued by inexperienced operators, high rents, says VKD Hospitality

VKD Hospitality's portfolio includes the wildly popular Miss Lily's at the Sheraton Grand and the recently opened Indochine in DIFC

Dubai's F&B sector plagued by inexperienced operators, high rents, says VKD Hospitality

Varun Khemaney (L) and Khalil Dahmash (R), co-founders of VKD Hospitality. Image: Supplied

Dubai’s F&B sector is oversaturated, with too many new people entering the emirate’s restaurant scene without an adequate understanding of the market, according to the co-founders of VKD Hospitality.

Founded in 2016 by Varun Khemaney and Khalil Dahmash, VKD Hospitality’s portfolio includes the wildly popular Miss Lily’s at the Sheraton Grand and the recently opened Indochine in DIFC.

In an interview with Arabian Business, the co-founders said that while Dubai’s F&B sector has improved over the years, a number of problems still persist.

“We think that the F&B scene in Dubai has come a long way. You can now find some of the world’s best F&B brands in the market, from very high end to more casual style restaurants,” said Khemaney.

“We believe, however, that there are still a lot of gaps in the market and the F&B scene still has a long way to go when you compare it to the likes of London and New York,” he added.

Additionally, Khemaney said that “Dubai is definitely oversaturated” when it comes to restaurants.

“We feel that a lot of people try and dabble in F&B without having a proper understanding of the business and what it actually takes to succeed in such a competitive environment,” he added.

The Rent Factor

Dahmash said that he believes F&B rents are “super high” and create a significant barrier to entry.

“A lot of young, talented entrepreneurs simply cannot afford to create their own concepts, so we do feel that it inhibits growth,” he added. “Even for entrepreneurs with deeper pockets, the rents are still very high and if your concept doesn’t do exceptionally well, it will definitely hurt your bottom line.”

In Dahmash’s view, landlords should support entrepreneurs by establishing long-lasting partnerships, rather than “trying to make quick cash and killing the business over a short period of time”.

The high turnover rates of restaurants in Dubai, Dahmash added, are largely a result of a lack of experience.

“Once they dive into it without having the proper experience they tend to fail. There are many moving parts that need to be considered when creating a restaurant,” he said.

“There is a lack of originality at times and people tend to copy other successful restaurants rather than bringing something new and fresh hoping that they achieve the same success,” he added. “That’s never the case.”

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