Hong Kong third wave: embattled restaurant sector faces HK$3 billion in July losses amid fresh Covid-19 restrictions

·5-min read

Hong Kong restaurants could lose as much as HK$3 billion (US$387 million) in revenue for July alone as unprecedented social-distancing arrangements made necessary by a third wave of Covid-19 cases deal a fresh blow to an already struggling sector, insiders have said.

Restaurant operators who spoke to the Post said takeaway and delivery services, along with steep discounts offered since a weeklong ban on nighttime dine-in services began last Wednesday, have failed to inject life into the sector, or offset lost revenue.

The ban and a rule capping customers to four per table were on Sunday extended until July 28, as the city’s number of confirmed coronavirus cases topped the entire tally for 2003’s Sars epidemic.

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Hongkongers queue at a restaurant in Kwai Hing, amid a third wave of coronavirus infections that began in July. Photo: Nora Tam
Hongkongers queue at a restaurant in Kwai Hing, amid a third wave of coronavirus infections that began in July. Photo: Nora Tam

To date, more than 100 Hong Kong restaurants have been visited by people later confirmed to be infected with Covid-19, including Tao Heung in Mong Kok’s Grand Plaza and a Fairwood branch at Ping Shek Estate in Kwun Tong district.

Simon Wong Ka-wo, president of the Hong Kong Federation of Restaurants and Related Trades, predicted the catering sector would lose HK$3 billion in revenue in July as a result of not being able to serve customers in the evening. Total restaurant receipts already plunged 31.2 per cent year on year in the first quarter of 2020, a loss of HK$21.67 billion.

Takeaways alone are not enough to make up for the massive drop in revenue from not being able to operate at dinner time

Simon Wong, Hong Kong Federation of Restaurants and Related Trades

“Takeaways alone are not enough to make up for the massive drop in revenue from not being able to operate at dinner time,” Wong said.

According to Openrice, an online restaurant guide, more than 250 Hong Kong restaurants went out of business in June alone. Wong believes that figure could rise in July. There are about 12,000 licensed eateries in the city.

73 new Covid-19 cases reported, several tied to hospital and restaurant clusters

David Leung Chi-wai, chairman of the Seafood Delight Group, said his 12 Chinese restaurants “did not do well” in the first week without dinner operations, even after introducing a 30 per cent discount for takeaway orders from 11am daily.

“Business did not pick up at all, not even with the lunchtime discounts. It’s getting tougher to operate,” he said, adding that revenues in July could drop by more than half from June.

To control costs as revenue falls, his group has reduced its orders of fresh seafood such as lobster, and asked some workers to take extended unpaid leave.

Leung said his restaurants in districts such as Kwun Tong and Sha Tin – where new infection clusters emerged – would be likely to suffer the most, as locals there were too afraid to dine out.

In Lan Kwai Fong, Central’s nightlife district, about a quarter of the approximately 120 restaurants and bars in the area have decided to close at night.

Business did not pick up at all, not even with the lunchtime discounts. It’s getting tougher to operate

David Leung, chairman of Seafood Delight Group

Anthea Cheung, director of the Lan Kwai Fong Association, said restaurants and bars could lose as much as 70 per cent of revenue in July due to the tightened social-distancing measures.

“A lot of business owners and staff have their fingers crossed that things will get better soon,” she said, as waiting staff and live band singers have been put on unpaid leave during the pandemic.

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Holy Eats, a restaurant and bar in Central’s Soho that once served only at dinner time, generated roughly 30 per cent of its normal sales after the ban on dining-in was implemented.

They hurriedly launched their first-ever lunch menu last Wednesday, which has earned them 10 to 20 orders per day since.

“Our sales last week were nowhere near our regular weekly sales,” brand manager Kristine Sage said.

Catering sector lawmaker Tommy Cheung Yu-yan, meanwhile, urged the government to allocate the surplus now in the city’s anti-epidemic fund to the embattled industry.

But while restaurants are being forced to absorb losses amid the pandemic, local delivery businesses are predictably booming.

Online delivery app Food Panda said customer demand on its platform grew 100 per cent year on year between January’s Lunar New Year in January and March.

“We cannot provide an estimation at the moment, but we expect a growth of demand in the New Territories and Kowloon residential areas due to the work-from-home policy of companies,” a spokesman said when asked about the uptick in takeaway orders.

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