HYDERABAD: New restaurants and pubs may be opening their doors in the city at a furious pace, especially in the IT hub, but many of them have shut shop over the past one year or so thanks to the lack of proper business planning.

Dozens of new restaurants that had sprung up in areas such as Jubilee Hills, Madhapur and Gachibowli have downed shutters or sold their establishments over the past year or so, said industry experts.

“Many non-restaurateurs are seen entering the business here in Hyderabad by forming partnerships and making a huge investment. What they often spend on interiors, lighting and décor is not recovered since business is dull across many pockets in the city,” said Pradeep Dutt, secretary general of Hotels and Restaurants Association, Telangana.

“Many people choose to set up in the IT corridor area assuming that business will be good, given the spending capacity of the residents of these areas. However, many IT professionals prefer fast food and meals on wheels these days. After this, many restaurant owners try to sell for Rs 10 or Rs 11 crore but nobody will burn this kind of cash on a restaurant today. Dozens of restaurants have closed down over the past one year due to this reason,” explained Dutt.

According to industry experts and foodies, it is mostly establishments that fall into the ‘fine dining’ or ‘luxury’ category that have been found shutting shop.

“Many people are getting into the F&B business without proper planning and understanding of customer profiles, location preferences and government policies. Even proper concept planning is not carried out in some cases,” said Sabyasachi Raychaudhuri, a food enthusiast and blogger.

“Due to this, a majority of them are unable to sustain the business and hence are forced to shut down. As per rough estimates, even among the businesses still in operation, nearly 60% are not making a profit. The average lifespan of a restaurant in Hyderabad is a little over one year,” added Raychaudhuri.