A tale of two countries

Executive speaks with Addmind about managing two regional hospitality hotspots

Addmind in Dubai

Addmind is primarily known for creating successful entertainment concepts and venues such as Iris, Indie and White, which was the winner of the 2015 World’s Finest Clubs Award. The year 2015 saw the company re-enter the food and beverage (F&B) domain, following a few unsuccessful ventures 10 years ago. The company took over the La Plage complex in Ain El Mreisseh and reconceived it into the Madame Bleu Beach Club and three restaurants: Popolo, Boulevard Beirut and Sea Salt.

The company also partnered with the restaurant Shogun Downtown over concept design, music and cocktails while its owner Aref Saadeh shared his food expertise.

The company’s growth in Lebanon was coupled with further expansion in the United Arab Emirates. Tony Habre, CEO of Addmind, said Dubai now constitutes 55 percent of the company’s total turnover and estimated growth to 65 percent by the end of 2016.

Executive speaks with Habre about the diversification of Addmind’s portfolio and about the dynamics and challenges of operating in two distinct markets simultaneously. 

E   Can you tell us why Addmind chose to extend its portfolio outside of nightlife?

Yes, we are diversifying into restaurants because it’s a natural and organic growth for us; we’ve been growing steadily as a company and we’ve always followed the trend in Lebanon and what people want. There’s still a big need in Lebanon for restaurants; even with everything happening, people still go out. There are fewer people, but there are still people and not a lot of new restaurants have opened recently so I think in the right place, there is a market for that.

I think La Plage and Shogun are set in great locations; they just needed the right concepts. It was a perfect place to refresh our restaurant concepts and diversify them.

E   And you did not feel that such concepts are changing your brand identity?

No, if you go to Boulevard Beirut you will see that the logo, design and setup look like us. Popolo looks a lot like us and so does Madame Bleu. We are integrating with something that we like and where we would like to go. Honestly, where we failed is in places where we wouldn’t like to go.

E   Can you compare 2014 to 2015 in terms of the overall growth of the company?

Our huge growth is in the UAE. In Lebanon, the nightlife almost stayed the same despite growth at the beginning of the year before the political situation took its toll, but I would say that, overall, the nightlife stayed more or less the same.

Because we started doing restaurants, we had growth at the company level within Lebanon but it’s still a bit early to know how much.

So far the nightlife, including beach clubs, constitutes 70 percent of our company’s businesses, with the restaurants making up the other 30 percent, though by 2017 I think it will be 50-50.

E   How do you manage your staff between Lebanon and the UAE?

We have a lot of common staff between Dubai and Beirut.

We have a big office in Dubai but the top management (global operations director, F&B manager, human resource manager, finance manager, etc.) are the same in both cities. Before, even the general managers (GM) were the same but since we grew a lot in Dubai we had to have separate GMs.

E   Are you facing a shortage of qualified staff? If so, is it more of an issue in Beirut than in Dubai?

It’s a problem everywhere. On the contrary, had we not had this base of people that we employed and trained in Beirut, there was no way we would have accelerated in Dubai. Our strength is in our staff who we were able to bring to Dubai.

By January, we will be around 900 employees of which 250 have been with us for eight years and are considered the pillars of the company, having started as wait staff and gone on to fill management positions.

We are opening our own academy, the Addmind Academy, in 2016 for our own team. The whole idea is to train our existing staff and our future staff in a very professional manner because it’s all about the staff at the end of the day.

Lebanon has a lot of good people and we have the service gene in our blood, but they just need training and language [skills] which is one of the problems we face in getting them to Dubai.

E   What are the major differences you have seen between operating in Lebanon and Dubai?

The cost of doing business in Dubai is the actual cost of doing business. It’s a country with an extremely high barrier to entry; the rents are extremely high, and your cost of business is also very high because you are getting many of your employees from outside and you have to pay for their visas and accommodation. Basically, the setup [cost] of a business is extremely high. It’s good if you are already doing well because as the barrier to entry is so high, it is difficult for competition to enter the market unless it is very strong.

This is the opposite of Lebanon, where you don’t have this high cost at the start, as your employees are already in the country and so are you; you are not mobilizing yourself. Also, [in Dubai] later on the cost is in the rent that is triple that of Beirut and the Lebanese employees who cost you at least double or triple [the amount in Lebanon] there.

This is why I say the revenue percentage is higher in Dubai but the profit percentage is better in Lebanon.

E   What are the rewards of operating in Dubai?

It’s a great country where revenues are really high, it’s stable and the market is there. You have 100,000 Lebanese living in Dubai with a considerable income and another 60,000 in Abu Dhabi. So you are starting with a good share of the market.

The financial risk in Dubai, however, is higher than in Lebanon because the investment there is bigger, but once you do well, you do better.

E   Are your venues in the UAE attracting only Lebanese or has your client base been diversified to include foreign expats?

The Lebanese help you get started but then they all have their cosmopolitan friends so we don’t have more than 30 to 40 percent Lebanese in our places. You have Emiratis, Palestinians, Jordanians, Iraqis [and] Europeans; you really have people from everywhere and since we have different types of places, we attract different nationalities to each.

E   Are you thinking of expanding beyond Dubai?

The Gulf Cooperation Council is going to come organically but in the coming two years it’s about time for a move to Europe. I’m sure it won’t be easy. It wasn’t easy in Dubai but we’ve done it once and we will do it again.

Nabila Rahhal

Nabila is Executive's hospitality, tourism and retail editor. She also covers other topics she's interested in such as education and mental health. Prior to joining Executive, she worked as a teacher for eight years in Beirut. Nabila holds a Masters in Educational Psychology from the American University of Beirut.

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