, Hong Kong

Hong Kong restaurants slightly more optimistic as social distancing restrictions relax

Extending dine-in hours and providing additional subsidies to affected restaurants are considered the ‘most effective’ measures by the government to support the F&B industry.

Restaurants in Hong Kong continue to hold a pessimistic outlook for the F&B sector's future, having been forced to adjust to the tighter dine-in restrictions implemented in response to the fifth COVID wave.

Deliveroo’s Q1 2022 Restaurant Confidence Index revealed that on average, restaurants ranked their satisfaction in overall business performance at 5.3 points, down by 0.1 points from Q4 2021.

However, with a boost from consumption vouchers and with dining restrictions set to ease from April 21, 34% of survey respondents reported a slightly more optimistic outlook for the industry, a jump of over 7% from last quarter. 32% remain hopeful about the overall economic environment, compared to 27% previously. 

54% of restaurant respondents saw a decrease or significant decrease in revenue from dine-in business during this year’s Chinese New Year holiday when compared with last year, whilst 34% reported an increase in takeaway business during the holiday.

59% foresee that they will be likely or very likely to increase their revenue in Q2 with the help of the Consumption Voucher Scheme, with 59% planning to offer dining and takeout promotions related to the vouchers.

A surge in confirmed cases and operating costs such as rising food prices have put high pressure on the F&B industry in Q1, with 66% having recorded a “decrease” or “significant decrease” in profit, whilst 17% said it remains unchanged.

39% claimed a “significant decrease” in revenue from dine-in business whilst another 32% recorded a “decrease”, yet 49% said revenue from takeaway business has slightly or significantly increased.

Shortened hours, unpaid leaves
34% have been forced to shorten the opening hours and even suspend the operations of their restaurants due to manpower shortage caused by a surge in confirmed cases in Q1.

32% have asked staff to go on unpaid leave in Q1, whilst 20% claimed they have both laid off staff and asked their staff to go on unpaid leave in Q1; 42% planned to lay off or ask their staff to go on unpaid leave in Q2.

83% revealed their restaurant’s operating costs have increased in the face of rising food prices during the fifth wave of the epidemic, in addition to other expenses such as cleaning and sanitising.

78% didn’t get a rent reduction or waiver, with 10% reporting an increase in rent.

Extending dine-in hours considered to ‘most effective’
Nearly half (45%) disagreed or strongly disagreed that the 2022-23 Budget — which suggested measures to support enterprises, which include rental enforcement moratorium for tenants of specific sectors through legislation — would help relieve pressure from restaurant operations. 

Only less than 30% (27%) agreed or strongly agreed such measures will relieve pressure from restaurant operations.

Extending dine-in hours (27%) and providing additional subsidies to affected restaurants (27%) are considered the most effective measures by the government to support the F&B industry, followed by increasing the maximum number of persons per table (22%) and F&B specific consumption voucher scheme (17%).

81%, meanwhile, believed the potential easing of social distancing measures in Q2 would be somewhat or very helpful for the F&B industry.

59% responded that the disbursement of the consumption voucher in April would be likely or very likely to help increase their revenue in Q2; 59% had or might have promotion or marketing plans related to the Consumption Voucher Scheme.

Since the beginning of the year, Deliveroo has provided marketing support and is over HK$10 million in a new campaign designed to enhance brand awareness of restaurant partners, with a variety of promotional offers for consumers beginning next week.

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