Hong Kong’s restaurant earnings logged a record decline last year, dropping 29.4 per cent from 2019 as the Covid-19 pandemic and sweeping social-distancing regulations took a devastating toll on the city’s catering sector.
The Census and Statistics Department revealed on Thursday that overall restaurant receipts for 2020 shrank to HK$79.4 billion (US$10.24 billion), down from HK$112.5 billion in 2019. It was the largest annual decline on record.
In the fourth quarter, restaurant earnings plunged 25.1 per cent to HK$19.5 billion from HK$26 billion over the same period a year ago.
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Hong Kong has been hit by four successive waves of Covid-19, which have left restaurants and other businesses reeling as multiple rounds of social-distancing measures followed in an attempt to curb the spread of the pandemic.
In December, officials imposed stringent precautionary measures at eateries, including banning dine-in services after 6pm and restricting the number of customers to two per table, while bars and pubs had to temporarily close altogether.
About 3,000 of Hong Kong’s 16,000 restaurants are believed to be on the verge of closing for good, with an indeterminate number already gone.
Meanwhile, restaurant expenditure last year similarly declined 28.4 per cent to HK$25.8 billion, while the sector’s spending for the fourth quarter also shrank 24.5 per cent year on year to HK$6.3 billion.
A government spokesman said the fourth-quarter drop had narrowed from the record fall of 35.3 per cent in the third quarter.
“There was a rather visible improvement in business in October and November, but this deteriorated again in December when the fourth wave of Covid-19 led to a renewed tightening of social-distancing measures,” he said.
The spokesman pointed out that the business environment for restaurants would stay challenging in the near term, as dine-in services continued to be restricted under the health crisis, and inbound tourism remained at a standstill.
“Therefore, keeping the epidemic under control ... with the concerted effort of the whole community is of pivotal importance to the recovery of such hard-hit sectors,” he said.
Simon Wong Ka-wo, president of the Hong Kong Federation of Restaurants and Related Trades, estimated about 3,000 restaurants were on the brink of closure as they took a severe beating from the evening dine-in ban and the closure of bars. He predicted that the sector would lose about HK$7 billion in February.
“The Lunar New Year holiday is one of the most lucrative seasons. The industry normally sees a profit of HK$10 billion from this period for big family or company banquets,” he said. “Now customers cannot dine out at night. Restaurants may see a loss of income of about HK$7 billion in February.”
Brian Lo, general manager of delivery firm Deliveroo Hong Kong, called on the government to provide further help to rescue the battered catering industry.
“The pessimism among the food and beverage businesses is no surprise and will only be compounded by the loss of Lunar New Year dine-in revenue,” he said.
“We have been advocating for further government help and considering new initiatives that will support restaurant employee protection schemes, as well as a rent reduction for operators.”
In its fourth round of relief funding in December, the government dished out HK$6.4 billion for businesses hard hit by the health crisis. The catering industry is to receive HK$3.4 billion, with individual businesses getting between HK$100,000 and HK$500,000 each depending on size.
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