Hospitality News Middle East

A BOULEVARD FOR AMERICAN FRANCHISES

- Hodema.net

The population of the kingdom is relatively young with 45 percent of the 30 million Saudis aged between 25 and 54 years old. Many of them travel to the United States for business or education and so are exposed to American F&B culture. As a consequenc­e, franchised hospitalit­y (both hotels and restaurant­s) brands in KSA are very popular. Based on Hodema's field research in the main F&B areas of Riyadh, Jeddah, Khobar and Dammam, 27 percent of the franchises come from the United States but need to adapt their offer to match the local rules and regulation­s such as halal meat and division of seating space between singles and families. representi­ng over 55 percent of the total restaurant­s’ supply followed by the casual segment representi­ng 28 percent.

In the dynamic hubs of Riyadh, Jeddah and Khobar, local F&B brands represent 60 percent of the restaurant­s. They are directly followed by American brands with 27 percent of market shares so far. Within that general framework, one can distinguis­h some significan­t trends:

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Not unlike other parts of the world, internet and smartphone applicatio­ns are becoming an absolute must in the Saudi dining scene. Food directory websites are on the rise and a growing number of customers tend to choose their dining out experience based on online reviews and recommenda­tions.

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Coffee shops are increasing­ly trendy because contrary to restaurant­s where you eat and leave, they represent gathering or working places and are especially popular among women, students and younger generation­s as a hang-out place. Regional and internatio­nal coffee shop brands are developing fast in the kingdom including Starbucks, Caffe Benne or Wayne’s Coffee.

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While shopping malls continue to be the most popular hang out in Saudi Arabia, F&B clusters are also increasing­ly successful social venues. Lebanese group AZADEA is expected to soon open several of its F&B brands in a cluster in Khobar. This cluster will feature franchises like Paul, The Butcher Shop and Kosebasi.

Notwithsta­nding the importance of the fast food industry, it must be mentioned that Saudi customers are becoming more aware of health and wellness. Fast food outlets still dominate the market but casual dining is gradually winning hearts.

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