Diversification feeds Sunset Hospitality’s global expansion

It isn’t new for hotels to diversify into opening their own chains of restaurants under various brand names, both within its properties and otherwise. Radisson, Marriott International, and Accor are just some of the hospitality giants that have forayed into the food service space and have massively reaped benefits out of it. Now, it is a whole other conversation of how hotel restaurants have been finding more success by standing alone. But, the fact of the matter is that hotels have realised that diversification may be the only way to not just find success, but – as seen during the pandemic – the only way to survive.

Speaking of diversification, UAE-based Sunset Hospitality Group (SHG), which celebrates its 10^th anniversary this year, has been sortieing into different verticals of the hospitality circle. What makes them unique, however, is that the group started with restaurants and slowly started expanding into lounges, beach clubs, and now hotels.

Renowned for curating contemporary hospitality experiences around the world, SHG is solidifying its presence in the Middle East and Europe by entering strategic markets like Spain and Greece and increasing its portfolio to over 50 operating venues, and extending footprints to 14 countries by the end of the year.

“There are two decisions we took to define the strategy for our business. One was to diversify geographically and by segments. The other decision was to be focussed on providing experiences. We took a conscious decision to stay away from anything that is transactional i.e QSR, deliveries etc,” said Antonio Gonzalez, CEO of SHG.

“We are going to see a big drive in the hotel business and service apartments. We aim to grow that segment exponentially and close that circle, because then we will be in all the key categories we want to be in. Our approach is fresh, as we come from F&B and then expanded into hotels etc. Usually hospitality groups start with rooms and then open restaurants. This gives us a different edge and shows a different way of thinking,” he added.

Another element that makes SHG, both unique and successful, in an over-competitive and over-supplied F&B market is how it has positioned itself as a business of socializing and not a business of food.

“We are engineered towards providing experiences, which is more crafty and curated – it’s almost like a different industry. We are in the business of socialising, while the others are in the industry of feeding – which is also very relevant. For them, it is more about volume, cost-consiousness, and being able to be fast and cheap. For us, speed isn’t as important. When it comes to the socialising business, we can add value through various other touch points,” he explained.

Moreover, while Dubai’s F&B scene might be over-competitive, Antonio doesn’t believe that the market is oversaturated. “I don’t think we are in a saturated market. We are in a mature market. Dubai has matured from a small city to a mature global city. It’s competing with London, Singapore, New York etc. We are going to see a slower growth rate than we have seen in the past, but we are also going to see the positives and negatives you see in a mature city. I have a clear vision for the future of Sunset, which is we will continue to expand as long as we have good opportunities, and that could be opportunistic, strategic, concept-driven, or location-drive,” he said.

Needless to say, for a business centred around physical interactions, Covid-19 and the restrictions that followed could have been catastrophic. While most businesses started rethinking their business model as a consequence of the pandemic, Antonio and his team firmly believed in people’s inane need to socialise, meet, and interact.

“When Covid-19 happened, one of the key discussions we had with the team was if socialising habits would change. That was a big ‘question mark’ as our business was not prepared for this kind of change as we had no focus on delivery. So we weren’t quick to react. Thankfully, we were very well protected on our finances as we were conservative on our cash reserves, so we could navigate that period quite well. We thought about changing our model, but the reality is as soon as the restrictions were lifted, we saw that the consumers went back to their traditional habits. We realised we made the right decision eventually,” he said.

As established, a huge consequence of the pandemic was the rapid adoption of digitisation, where all businesses were seen scurrying around to integrate the best, most advanced technologies into their operations. Technology companies were coming out with innovative solutions to cater to the different needs of its clients and customers. However, there were many who were struggling to cut the clutter and decipher how much technology they actually need, and how too much technology could, in fact, be detrimental to their business.

SHG, however has been focused on being customer-centric, and decided to not follow the mob in rapid digital adoption and only use technology where it was absolutely needed. QR Code, for instance, which made a tremendous comeback in the last two years, weren’t seen as essential for business beyond regulatory restrictions, as Antonio felt that it doesn’t really add much value to overall customer experience.

“Technology will play a higher role as we keep expanding but I don’t think it will be significant in terms of the consumer interface. I don’t want to have additional technology that may simplify our life and process and reduce our costs but put a burden on consumers. Just because we have the technology, doesn’t mean we have to use it,” he said.

“Internally, we are taking a lot of measures to improve our processes, but we are very mindful to make sure that doesn’t affect the customer experience. So then, we would use technology for our POS systems, customer relationship management, ERP solutions across the company to optimise procurement and pricing, social media interactions etc. But will I replace a hardcopy menu with a QR? I’m not sure if it adds value to the client. Somebody has to prove to me that it does,” he quipped.

For the Group, this year began with the opening of DREAM and Garden of Dreams, a dining and entertainment concept, DREAM blends live musical acts and performances. Another upcoming venue is L’Amo Bistro del Mare, an upscale Italian seafood restaurant in Dubai Harbour, scheduled for a Q1 opening.

SHG is also bringing the brand Mott 32 to Dubai, one of the leading Chinese restaurants in the world. METT Hotels & Resorts will expand with a Summer 2022 opening on the sun-drenched shores of the Costa Del Sol in Spain. METT Hotel & Beach Resort Marbella – Estepona will house 253 guest rooms, multiple dining experiences, a bespoke swimming pool, ample beach, and a state-of-the-art gym along with a modern spa.

“The beauty of F&B is that there is a very low barrier to entry. Everybody with a good idea, funding and passion can enter the business. And that’s great as it drives innovation in trends, gives more opportunities and keeps us all awake to be ahead in this competitive market,” he said.

“The first two months of 2022 has shown that we have more than doubled our business compared to the same period last year and we see the trend continuing. We plan to be twice our size by 2023. When we started the business, we tried to get funding from friends and family, who have become partners now. As we look at the future, we are actively looking at more funding options to continue that pace of acceleration. The bigger your business, the more fund you need to accelerate growth. Now, we are not just looking at operational organic growth, but we are also looking at acquisitions to maintain steady growth,” he concluded.