Expat fee taking its toll on restaurateurs

June 10, 2018

Saudi Gazette report

DAMMAM — Even though the price of renting a commercial space has decreased by more than 50 percent in comparison to previous years, investors are still hesitant about investing in the food industry due to high operational costs, Al-Yaum newspaper reported quoting economists and investors.

Sultan Al-Misiry, an investor in the food industry, has said the current period is the best time to invest in the food industry.

“The rent is at an all-time low. Some property owners even offer the first three months free. The rental contracts can extend to five years with a fixed price. Two years ago the average annual rent for a restaurant space was SR200,000. Today, you can easily find a similar space for SR150,000,” said Al-Misiry.

He said the cost of expatriate fees is taking its toll on restaurant owners.

“A lot of employers prefer hiring Saudis as it saves them from having to pay workers’ taxes and buy flight tickets. Many restaurants however have closed due to financial burdens,” said Al-Misiry.

Economist Mohammad Al-Qahtani said running a restaurant requires dedication and commitment.

“It’s a highly competitive field. Restaurants are not just competing with national trademarks in our country, but also international chains. Running a restaurant will require at least six expatriate workers between cooking, packaging, cleaning and preparation. It is a great financial burden on the owner,” said Al-Qahtani.

June 10, 2018
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