Thursday, February 28, 2013

How Hookah Lounges Manage Risks

The Ministry of Municipality and Urban Planning stopped issuing permits to open up Hookah (sheesha) lounges and cafés a couple of years ago. I’m guessing that the ministry decided this to start limiting the hookah lounges and encourage the people to open up other businesses. A permit is required to open up a hookah lounge today, and the only way to get one is through buying one from an existing lounge. The prices of those permits are increasing rapidly and have reached up to 2 million riyals, for the permit only.

Because of the many competitors, Hookah lounges’ managers do their best in trying to attract and keep customers loyal to their lounges. There are many approaches to this, including the decoration of the lounge, prices, quality, service, and other strategies to keep the customers as long as possible in the lounge.

In his book, Mix it up (2010), David Grazian talks about how moviemakers manage the risks using various ways to maximize revenue; it is interesting how hookah lounges approach to minimize the risks similarly, and effectively.
The lounge I looked at is a modern lounge, called Central Lounge; it is different than any other lounge I’ve seen. It uses the same decorations that T.G.I Friday uses in their restaurants.

Product Placement
The restaurant uses creative product placement. I asked the workers if Mustang paid for this or not, but they had no idea, but I’m pretty sure Ford paid (or at least gave them for free) to put the face of the classic Mustang on the wall, but it sure prettier than a portrait. You can look at how the lounge looks from the lounge upstairs here (notice the different products displayed on the wall).

Sticking to Traditional Genre
Flavors: Grape, Grape with mint, and Apple flavor are the most preferred flavors of hookah around the world; this is why they have enough stock of these flavors, and a little of different flavors.
TV, WiFi, and Game Centres: These are also some of the things that you would see in any other lounge. This lounge offers these to attract more customers as well as to keep them stay in the lounge as long as possible.

Creative Accounting
The water in the hookah acts like a filter for the smoke, and without it, the smoke will be too hot for a human to smoke. The managers charge extra for adding ice to this water, and from what I see, everyone adds ice. This small amount that you pay for the ice generates more money than you think.

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