Kuwait’s membership in the Organization of the Petroleum Exporting Countries (OPEC) ensures that money is pouring into the nation. In fact, half of Kuwait’s GDP is derived from oil sales. So what makes Kuwait such a cornerstone for restaurants interested in expanding to the Middle East?
A Burgeoning Economy in Kuwait
Kuwait experienced strong GDP growth of 3-5 percent from 2012–2013, posting a budget surplus of $47 billion. They experienced a 13 percent increase in international tourist arrivals from 2001–11 with receipts totaling $5.3 billion. The compound annual growth rate (CAGR) for tourist arrivals from 2012–22 is estimated at 4.9 percent, with the hospitality sector slated to grow at 8.1 percent from 2011–16.
Investment in New Developments
Kuwait is implementing a $110 billion development plan to diversify the oil-based economy and modernize the country. New roads, bridges, hospitals, and power stations are getting built, along with some exciting projects near the capital. A $6 billion expansion of the Kuwait International Airport is in the works, with a second terminal arriving in 2016. By 2020, Kuwait hopes to have its $7 billion Metropolitan Rapid Transit System operational.
Madinat al-Hareer: the City of Silk
Opposite Kuwait City is the site that will soon turn into the country’s new tourism mecca, Madinat al-Hareer (the City of Silk). Featuring a new international airport, sports complex, convention centers, and a port to handle traffic from Iran and Iraq, this $132 billion project boasts many wonders: most notably, the Burj Mubarak al-Kabir, poised to become the tallest building in the world at 1,001 meters high.
International Presence in Kuwait
With 2.2 million foreigners living in Kuwait and a market of $3.5 billion spent annually at restaurants, savvy restaurateurs from around the world are flocking to the country. There are currently 4,783 restaurants in Kuwait – that’s 1 for every 230 people. IHOP, Chili’s KFC, Burger King – all of the large American restaurants are there alongside international brands such as Nando’s, YO! Sushi, and Peppe’s Pizza.
Success Despite the Crowd
Kuwait is the franchise capital of the Middle East, with a steep preference for fast food. Vying for those Kuwaiti Dinars, restaurants are adapting their brands to the culture. Ruby Tuesday has sheesha in their restaurant and McDonald’s developed the McArabia, a grilled chicken or kofta sandwich, served on an Arabic style pita with veggies and garlic mayonnaise.
Opportunity Abounds in Kuwait’s Hospitality Industry
Thanks to Kuwait’s love affair with fast food, almost 9 out of 10 people are overweight in the country. Studies have determined that this epidemic is due to the abundance of restaurants paired with a lack of leisurely activities available. With few enjoyable activities to take part in, people find themselves eating to pass the time with friends and family, opening up a niche for diet foods and health-branded restaurants.
For more information on the state of Kuwait’s hospitality industry, subscribe to our free newsletter.