Hong Kong Covid-19 fourth wave: about 70 per cent of restaurants face closure amid tough social-distancing measures, poll reveals

Kanis Leung
·5-min read

About 70 per cent of Hong Kong restaurants polled have said they face closures in the next three months amid tightened social-distancing measures rolled out to contain the Covid-19 pandemic.

The Institution of Dining Art said on Tuesday a similar percentage of respondents also planned to lay off staff in the coming quarter.

The industry body surveyed 136 catering businesses in mid-December and found 19.9 per cent of them had either closed or were facing the threat of closure. The findings showed that some businesses might not survive till the Lunar New Year in February.

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Association chairman Ray Chui Man-wai said the sector’s biggest challenge was the social-distancing measures imposed on catering businesses amid the fourth wave of coronavirus infections.

In the fourth wave, we don’t have many takeaway orders. This is a fatal factor

Ray Chui, chairman, Institution of Dining Art

Restaurants are now running at half their capacity and can only serve up to two people per table, with dine-in services banned between 6pm and 5am.

“During the first and second waves, there were some takeaway businesses that helped compensate for our losses … But in the fourth wave, we don’t have many takeaway orders. This is a fatal factor,” Chui said.

He felt residents had become accustomed to the “new normal” amid the pandemic, and some people had stored a lot of ingredients at home so they could cook on their own.

After the fourth wave of infections started in late November, officials imposed stringent precautionary measures at eateries, while also ordering gyms, cinemas, beauty parlours and bars to suspend operations. The restrictions are believed to have dealt a big blow to the city’s struggling businesses.

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In the next three months, 70.6 per cent of respondents said they faced the risk of closing down, while 73.5 per cent had plans to lay off workers.

More than 16 per cent of the surveyed businesses already laid off 20 per cent of their staff while nearly 10 per cent had slashed their workforce by 30 per cent.

Between September and November, the unemployment rate for the food and drink sector stood at 13.1 per cent.

Last week, the Legislative Council passed HK$6.4 billion in financial aid for businesses hard hit by the health crisis. The catering industry will receive HK$3.4 billion for 17,000 outlets. Depending on their size, restaurants will receive between HK$100,000 (US$12,900) and HK$500,000 each.

People dine at a table in a Hong Kong restaurant with a partition board installed to prevent the spread of Covid-19. Photo: Reuters
People dine at a table in a Hong Kong restaurant with a partition board installed to prevent the spread of Covid-19. Photo: Reuters

Chui welcomed the assistance, but said the subsidies offered during various waves of the pandemic only put them on a drip, merely ensuring they did not have to close down immediately.

“We can’t see a ray of hope yet,” he said, urging the government to further improve a full loan guarantee scheme by raising the borrowing limit from HK$5 million to HK$10 million.

A Shanghai restaurant chain that runs six outlets in the city reported a 40 per cent month-on-month slump in revenues in December.

“Chinese restaurants often serve a big group of customers,” said Edwin Kam, the chain’s general manager. “If only a table of two is allowed, it’s difficult for us to prepare food in such a small amount.”

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Kam admitted his firm would consider laying off 10 per cent of his 200 workforce if the pandemic did not improve within three months.

“If we can’t see a better scene by Lunar New Year, we will face great pressure to reduce our workforce,” he said.

Sherin Lo, a chef at a Japanese restaurant in Tsim Sha Tsui, estimated December’s revenues at her eatery would be down 70 to 80 per cent over the same month last year.

Lo said her outlet mainly served Teppanyaki, a cuisine that uses an iron griddle to cook food, so it was impossible for them to sell takeaway food.

Applications for a second round of government handouts for low-income residents will open on January 4. Photo: Bloomberg
Applications for a second round of government handouts for low-income residents will open on January 4. Photo: Bloomberg

“Our company decided not to lay off any staff. So, it’s difficult to operate,” she said.

Meanwhile, Community Care Fund Task Force chairman Law Chi-kwong said applications for a second round of government handouts to low-income residents would open on January 4.

The handouts are targeted at the city’s so-called “N-nothing” families, Hongkongers who do not qualify for public housing and are not eligible for Comprehensive Social Security Assistance (CSSA), but are struggling to make ends meet.

The scheme distributes money from the Community Care Fund, which was established by the government in 2011 to help residents in need of financial aid.

Covid-19 brings grim tidings for the restaurant business in Hong Kong

“A sum of HK$1.4 billion will be set aside for the second round of handouts. We estimate that it will benefit around 137,150 households, or around 353,600 people.” Law, also the city’s welfare minister, said in a press conference.

He said the first round of the scheme had more applicants than expected, while attributing the growing population of “N-nothings” to the economic downturn caused by the pandemic.

The first round of handouts were launched in July 2020 and consisted of around HK$1.1 billion, benefitting 111,000 applicants.

But he said the second round would likely be the last tranche of government handout under the scheme as authorities would improve various other schemes in the second half of next year to cover “N-nothing” families.

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