By Bernd Debusmann Jr
The Meat Co, Folly, McGettigan's and Trader Vic's among operators urging Dubai Retail to waive fees amid Covid-19-related losses
F&B operators in Dubai’s iconic Madinat Jumeirah are urging Dubai Retail to help offset an “extremely pessimistic picture for 2020” amid a slump caused by Covid-19 pandemic.
In an April 27 letter seen by Arabian Business, the F&B brands request some operating costs to be waived, including rents from March to December 2020, and the handling fee on licensed beverages - which is charged by landlords - until the end of the year.
They also propose a revision of rental terms in December “to provide that rent, including service charges and marketing charges, shall be variable and calculated at the rate of 10 percent of monthly revenues.”
The letter was signed by operators of popular venues including The Meat Co, Belgian Beer Cafe, Folly, Anar, McGettigan's, Trader Vic's and more. A number of these restaurants have since re-opened.
On May 14 Dubai Retail – the management arm of Dubai Holding – agreed to waive basic rent and service and marketing charges during the period of the government-enforced mandatory closure period, sources familiar with the matter said.
However operators sent a second letter on May 17 claiming the response "does not really help us in any way to plan the way forward in terms of cash flow and other business needs."
"We would like to urge the focus to be on a complete solution and answers to all of our requests....so that we can plan if it is viable for us and the business is sustainable in the short, medium and long term,” the letter seen by Arabian Business said.
It added: "we cannot rely on drip-fed one chapter at a time short-term commitments and need to have extreme clarity for the years 2020 and 2021 to move forward."
Arabian Business has contacted Dubai Retail for a comment.
Across the city known for its bustling F&B scene, Dubai restaurants have reported heavy losses - while others have permanently closed - as a result of the coronavirus crisis.
In early May – when restaurants were still allowed to operate at only 30 percent capacity – over 100 industry leaders, collectively representing more than 50 percent of Dubai’s F&B sector, said they were losing more money by being open than closed.
"We must inform you that in fact, it would be more damaging to open for business now thereby losing more money with rent and employee liabilities than to choose to remain closed,” a separate letter said at the time.