From farming to hospitality
Sama Hospitality Ventures (SHV) started off as an idea to make commercial use of co-founders’ Ali and Omar El Mais’ late father’s land in Bekaa where the two brothers grew up. “We had to look for a higher return alternative than planting wheat or just leaving the land idle,” explains Ali who comes from an investment management background and completed his MBA at INSEAD. “Why not use the family’s farming heritage to pivot into services and hospitality, all while preserving and amplifying the region’s cultural and culinary heritage?”
The start: Sama Chtaura
The first foray into hospitality was in 2013 with the launch of Sama Chtaura, a 7,000 sqm outdoor events space that can hold up to 1,200 guests, a restaurant that can seat 300 guests, and a 1,000 sqm central production kitchen, which also serves the other SHV outlets and off-premise catering events. Pre-crisis, with the events industry thriving in Lebanon, Sama Chtaura would serve upward of 80,000 guests across weddings, catering events and restaurant customers per season.
Trial, Error and Initial Setbacks
Building on Sama Chtaura’s success, SHV went into third-party venue management and events services as a way to integrate their different services together. While those initiatives were fairly successful, they proved unsustainable due to misalignment with partners, and due to loss of focus caused by being spread too thin across too many product offerings.
Besten El Hor: Family Leisure Park
“This period of trial and error included experimenting with a number of pop-up concepts,” explains Omar who studied and worked in marketing in the US, “Eventually leading us to identify a gap in outdoor family leisure offerings in the Lebanese market.” This led to the launch of Besten El Hor in 2017, a 60,000 sqm venue built in a poplar forest with 30,000 trees (“hor” means “poplar” in Arabic, hence the name “Besten El Hor”). It offers families a venue destination where they can spend the day in nature, enjoy traditional countryside cuisine, and engage in a range of activities including adventure games, like zip lining, wall climbing, and air walks; all while taking advantage of the swimming pools, or biking through the forest discovering different farm animals. Besten El Hor also includes a separate evening outlet that offers guests the chance to relax around bonfires while enjoying finger foods and a range of games and competitions. The day venue has a daily capacity of up to 1,000 guests while the evening outlet can host up to 350 visitors. The overall project was an instant success, receiving over 60,000 visitors in its first season and exceeding ROI expectations by a wide margin. In response to this growth, SHV is now developing a 20-unit ecovillage within Besten El Hor that is set to launch in Spring 2021, as many guests expressed interest in staying overnight or spending the weekend at Besten El Hor. This is also intended to increase domestic and international tourism flows into the region. The eco-village will also seek to emulate traditional Bekaa architectural elements.
Turning the seasonality challenge into a competitive strength
Seasonality was a key challenge to the business, as SHV generates 90 percent of its revenues in the period from May to October. This requires that the operation have the flexibility to shrink to 50 employees during low season and expand to over 200 staff during high season.
“Maintaining service quality and consistency remained a priority,” Ali explains, “So this pushed us to develop proprietary production processes and training programs, to be able to effectively ramp up staff every season, both on the food production side and on the customer service aspects.” The training programs include classroom training on soft and technical skills, real-time application under the guidance of the training man- ager, and a comprehensive test at the end of the training. The ability to train beginners in a quick and efficient manner became a key strength for the business, especially in the context of seasonal, volatile work, where SHV had to be quick at ramping staffing up and down in response to change in demand.
Investing in Bekaa had an inherently positive impact on the community. The majority of the ingredients SHV uses are sourced from local farmers and artisanal producers, while in terms of employment, the company hires and trains over 150 seasonal staff from the region’s schools and colleges. Throughout this process, we also identify high potential individuals to join us on a full time basis.
Doubling down on farm to table: Sufra
The artisanal foods stations were an instant success with Besten El Hor guests, who showed a lot of excitement and enthusiasm for authentic, farm-to-table experiences. This led the team to create Sufra, a new farm-to-table concept inspired by the typical Bekaa farmer’s lunch. It was planned to launch this year but was postponed to Spring 2021 due to the current economic environment. The first prototype of Sufra will be implemented within Besten El Hor’s premises, but will be completely independent from the other outlets in the venue. Beyond proof-of-concept, the plan for Sufra is to be scaled in urban environments, as a rural escape within the city that will also include mouneh items produced in our artisanal workshop in Bekaa.
“Investor financing is hard to find and comes with too many strings for new ventures,” Ali told Executive. “So we opted to rely on bank loans and personal equity, investing over $4.5 million across our project, a portion of which came through the Lebanese Central Bank’s subsidized loans program. And more recently, we have started receiving investor inquiries from potential partners looking to discuss JV or franchising agreements.”
Navigating the collapse
When the multiple crises hit, including the economic collapse and the Covid-19 pandemic, SHV switched into emergency mode, focusing on two priorities: 1) Cutting all unnecessary costs including bringing any outsourced services in-house and discontinuing any non-essential offerings 2) Positioning SHV to capitalize on the eventual economic recovery by continuing to invest in operations and product development. SHV is currently engaged with Hodema consulting to further streamline standard processes and training programs. The company also enlisted the help of GWR consulting to support in obtaining ISO 22000 certification for the central production kitchen. The company also opted to de-lever its capital structure to further reduce uncertainty in the business as there was no way to predict cash flows this year. In regards to Covid-19 precautions, the different outlets were able to retain decent volumes due to the outdoor nature of the venues, and stringent Covid-19 precautions were put into place.
Exploring additional growth segments
Direct-to-consumer food brands have seen big growth in recent years, a trend which was accelerated by the onset of Covid-19 and hyper-digitization. “We are exploring a number of initiatives we could launch out of our existing infrastructure,” explained Omar, “We are using our existing assets to capitalize on emerging trends.”
“As trying as the current year has been,” Ali says, “Managing to navigate this series of financial, political and pandemic shocks, further reinforced our belief in both the durability and scalability of our business model.” Moving forward, SHV’s growth efforts will concentrate on scaling the Besten El Hor and Sufra concepts while Sama Chtaura will remain a single-location project. “The company’s strategic priority for 2021 is to work with investors to expand abroad,” Omar adds, “As our focus on the outdoors is especially appealing to investors and consumers in the Covid era.” Ali concluded the conversation on a hopeful note, saying, “We still seek to expand within Lebanon when the economy recovers, as we see massive potential within our focus segments and through utilizing our existing infrastructure.