UAE hospitality chief banking on year-end recovery

• Sunset predicts 50% bookings drop
• Pressing on with global expansion
• Confident in Dubai’s resilience

Sunset Hospitality Group, which runs a series of high-end restaurants and beach clubs in Dubai, expects sales from its core UAE business to drop by as much as half this year as the Iran conflict hits consumer sentiment. But the company is accelerating expansion overseas.

Chief executive officer Antonio Gonzalez said revenue in the group’s home market, which accounts for roughly two-thirds of total sales, fell about 55 percent year-on-year in March. Sales are set to decline at a similar pace in April, after what had been shaping up to be a record month, he said.

“We were looking at an amazing April, probably the best month in history,” Gonzalez told AGBI.

Hotel operators have previously said takings in the first quarter, which is usually peak season, could fall by 50 percent.

Gonzalez said high-end venues reliant on foreign visitors, restaurants such as SushiSamba, Mott 32 and Signor Sassi, have been hit hardest. Travel disruptions and security concerns have seen reduced footfall, he said, while more community-focused concepts, such as Joe’s Backyard and The Garden Project, catering to residents, have been more resilient.

Gonzalez expects trading conditions to remain weak through the summer, a traditionally quieter time for the industry due to the searing temperatures. Revenue is likely to run at 50 percent to 70 percent of last year’s levels before recovering in the fourth quarter, he said. 

For the full year, UAE performance is likely to be “roughly half” of 2025, he said.

Supplied: Sunset Hospitality Group

Despite the hit, the privately-held group is pressing ahead with an ambitious global growth strategy, highlighting a divergence between short-term pressures in the Gulf and longer-term expansion ambitions.

“From a strategy perspective, nothing has changed. It’s more about adjusting timing,” Gonzalez said.

In February, the company agreed to acquire a majority stake in Solutions Leisure, a home-grown rival, adding venues including Asia Asia, Warehouse and Lock, Stock and Barrel to its portfolio.

And during the past three weeks, Sunset has made further commitments for new projects in markets including Italy, Vietnam, Thailand, Spain and the US, as the company pushes to scale its international footprint. The group currently operates in 25 countries and is targeting as many as 160 to 180 venues by the end of the year, up from about 120 today.

Sunset Hospitality was founded in 2011 by Gonzalez and Ahmad Hafez and has grown into a “global lifestyle operator” spanning hotels, restaurants, beach clubs and nightlife venues, backed by minority investment from Goldman Sachs Asset Management.

The company is also expanding its hotel division, METT Hotels and Resorts. About 14 properties are either operational or in the pipeline. New hotel signings in recent weeks include projects in Danang in Vietnam, Alicante in Spain and Phuket, Thailand, while a Milan opening is scheduled for June.

Back home, however, the conflict is forcing more cautious execution. A new Dubai venue had been slated to open during the Eid holiday but has been delayed. Management is now weighing a later launch depending on market conditions.

• UAE hospitality businesses brace for impact of war
• Dubai set for swift rebound if conclusive peace achieved
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“It’s something we’ve been working on for two years,” Gonzalez said. “We’ll open when the market tells us it’s the right time.”

While uncertainty remains high, Gonzalez said he expects Dubai to rebound. He cites a track record of recovery by other cities from past crises.

“You had 9/11 in New York, you had the tsunami in Thailand, you had the terrorist attacks in Sri Lanka and Bali, you had the whole Covid pandemic and terrorist attacks in London,” he said.

“There are so many challenges that key cities similar to Dubai have gone through and the recovery has always been there. I’m very bullish on the future. It’s a question of timing, not direction.”