Elevated rents ‘big problem’ for Hong Kong restaurants as closures mount
Industry leader Simon Wong says decline in tourist spending will also hinder sector’s recovery
Hong Kong’s restaurant industry is expecting the wave of business closures to continue into the second half of the year with little hope for a quick turnaround, following a string of shutdowns of well-established chains in the city.
“We are worried about the overall situation in the second half of the year,” Simon Wong Ka-wo, president of the Hong Kong Federation of Restaurants and Related Trades, told a radio show on Saturday.
Wong cited rent as a “rather big problem”, with industry observers saying that prices remained elevated. However, some landlords had recently reduced rents, and in certain areas, prices had dropped by up to 15 per cent over the past six months, he added.
“However, when calculated by cost compared with the Greater Bay Area, especially Shenzhen, our costs are still higher,” he said.
“So, in terms of labour, rent, ingredients, other administrative expenses and promotion, it is precisely the cost-effectiveness that puts immense pressure on operating a restaurant in Hong Kong.”
Bakery chain Taipan Bread & Cakes, the inventor of “snow skin” mooncakes, closed down all of its branches earlier this week after more than four decades in the business, becoming the latest major chain to shut down in recent years.