DUBAI (Reuters) – Running a restaurant in Dubai, where a discerning international clientele has more than twice as many dining options per head as in New York, was a cut-throat business even before the coronavirus struck.
Now restaurateurs are having to adapt fast by learning how to make money delivering their food, a service new for some and for others more familiar as a marketing tool than a profitable sideline.
“What this epidemic has done is leap forward the digital age of [food] ordering by five years,” said Mohamad Ballout, CEO of Dubai-based Kitopi, which runs shared kitchens specifically for online deliveries.
For fine dining Peruvian restaurant COYA that has meant getting its waiters to drive deliveries and, once it decided its signature raw fish ceviche was too fragile to take off-site, turning its mashed avocado guacamole dish into a kit for customers to combine at home.
“You have to review everything… Coming to delivery we had to make sure it transports well… make sure it keeps hot,” its operations head Cedric Toussaint told Reuters. “The hardest point was health and safety.”
COYA will review after September whether to keep deliveries going.
Around half of United Arab Emirates food and beverage units have temporarily closed, industry consultancy JLL estimates, and a survey it compiled makes for sobering reading.
It shows UAE food delivery revenues fell as coronavirus restrictions increased, including a month-long 24-hour lockdown in Dubai that began mid-March. They fell 19% year-on-year in March and 7% in February.
Dine-in revenues fell 16% in February and 52% in March, with restaurants forecasting a 76% drop in April despite Dubai allowing them to re-open at 30% capacity from April 24.
JLL’s initial findings also show that Dubai, where tourists and residents eat out several times a week, offers roughly twice as many dining spots per head as New York.
Many former customers now perceive home cooking as a safer option and may well continue doing so.
“It will be quite a while before people have the confidence to go out into a dine-in environment on a mass scale,” said Duncan Fraser-Smith of Cutting Edge Hospitality consultancy.
Dubai-focused campaign group The Middle East Restaurant Association has asked the government for long-term industry support, and called for delivery aggregators such as Deliveroo and Zomato to reduce commission fees.
“The recovery profile of the restaurant industry is expected to be a lot slower than other industries,” JLL’s Alexis Marcoux-Varvatsoulis said.
Meanwhile Chatfood, a platform that enables direct customer orders without commission, has seen a rise in subscribers, especially from high-end restaurants, co-founder Ben Mouflard said.
Among those that have closed is a three-branch Arabic food restaurant catering to office workers and shisha smokers, an activity now banned.
“We shut down the operation because it would not be profitable,” its co-owner said, declining to be named.
His business did not deliver, and setting up a service would have been a tough investment amid strong competition, he said, adding he was still paying staff but did not know for how much longer.
(Reporting by Lisa Barrington and Tarek Fahmy; editing by John Stonestreet)
