Despite Challenges, Middle East Hotel F&B sector continues to thrive: Panel Discussion

The food and beverage (F&B) sector within Middle Eastern hotels continues to significantly contribute to revenue despite the challenges the hospitality sector faces.

"On the opening day of the Future Hospitality Summit in Abu Dhabi, Michael Grove of Hotstats highlighted that the F&B sector in the Middle East accounts for around 40% of hotel revenue. The event, spread over three days, brought together over 1,000 hospitality professionals, featuring more than 150 speakers in various formats, centered around the theme of "Focus on Investment."

Grove pointed out the region's notable growth in room rates, mentioning that a significant portion of UAE hotel revenue comes from beverage sales. He also touched on the return of conferences and events, emphasizing the resilience of the industry post-pandemic.

Comparing the situation before the pandemic, he mentioned that there's been a slight decline in the F&B sector. The option for patrons to dine outside hotels has grown, changing the dynamic from when hotels were primary dining locations. While F&B profitability is under strain in parts of Europe, with hotels seeing profit margins as low as 12%, the Middle East fares better.

Despite challenges like rising input and labor costs, Middle Eastern hoteliers have made operational adjustments during the pandemic to maintain efficiency without compromising performance.

During one session at the Summit, F&B executives emphasized the role of celebrity chefs and franchises in boosting performance. However, Marvin Alballi of Arenco stressed the importance of ensuring the brand's relevance to the local market and its long-term viability.

Tatiana Veller from Stirling Hospitality Advisors shed light on the declining profitability in the F&B sector. She also raised concerns about labor challenges, emphasizing the importance of hiring the right talent to maintain service quality and profitability.