Hong Kong protests force many restaurants to close permanently
published : 13 Oct 2019 at 19:41
writer: South China Morning Post
Stand-alone restaurants in Hong Kong which are not part of a big dining group are finding it increasingly difficult to keep their doors open amid ongoing political protests.
One in 10 shops in the retail heart of Causeway Bay are now reportedly vacant and hundreds of restaurants have closed, or will soon close, because of the resulting downturn in tourism, coupled with a sharp decline in corporate events and local spending.
One such stand-alone restaurant, Daarukhana, had to close its doors recently after only one year in business. "The protests killed us," said Sanat Patel, founder of the award-winning fine-dining Indian restaurant which was located on Thomson Road.
"We were located in the middle of all the protests and lost too much revenue as we couldn't open on numerous days from the beginning of June," he continued. "We had just one restaurant but even the big restaurant groups are having trouble as of now. It has been over four months since the protests started."
Closing up shop
One restaurant group we talked to, which did not want to be named, agreed with Patel, saying the drop in tourism and lack of corporate events in many of its restaurants in the Tsim Sha Tsui and Central areas were affecting business.
"There is a significant decline in tourist arrivals and, in addition, as we cater for a large amount of corporate activity, the reduction in business travellers to Hong Kong is also affecting this segment," a representative said.
Chan (not his real name), who owns a public relations company that represents numerous restaurants and bars, said: "The food and beverage sector has been hit quite hard since the protests in June - that, combined with the summer season [when many leave for holiday].
"There is a lot less tendency for guests to dine out or to spend money given what is happening in Hong Kong, especially on the weekends. Observing our portfolio of clients, the restaurants most badly hit are the ones in Central, Causeway Bay and Wan Chai, the key protest areas. The more accessible and low average spend restaurants are less affected in comparison to the more premium restaurants, that's for sure."
Chan does not think the protests are fully to blame for recent closures, which in Central have included Bindaas Bar + Kitchen and Gough's on Gough.
"Protests are just one of the factors, but if you look at it from a bigger picture, Hong Kong has far too many restaurants and the market is completely saturated," he added. "There are restaurants that are bound to close due to various reasons, so, therefore, protests are not the sole reason for closures."
New openings, despite business going down
However, there have also been a lot of restaurant openings in the past few months, such as Treehouse and many others at H Code, Wolfgang Puck Kitchen, Chatterbox Cafe, Duck & Waffle, various venues at the new K11 Musea, and many others.
Despite many closings, new restaurants, such as Treehouse, in Central, have opened recently. (South China Morning Post photo)
"The beauty of Hong Kong is, one place closes, another place opens. I would estimate that a lot of restaurants are still opening because of lease commitments, as the protest movement was totally [unforeseen]. I suspect most restaurateurs will put a hold on all their new restaurant or cocktail bar projects due to all the uncontrollable conditions of Hong Kong," Chan continues.
Some restaurants continue to thrive
As for how to tackle the conditions that have hit the food and beverage business, Chan says: "It's survival of the fittest; we keep doing what we do and we have a strategy in place to tackle this wave. This could be by promotions, adjustment of menus and pricing, switching around opening and closing for days of the week, and more."
Not every tourist area is suffering. When we asked some of the hotels in Tsim Sha Tsui East, for instance, we were told the casual buffet restaurants were still doing well and the more upscale fine dining restaurants were "up and down".
Haku's Agustin Balbi also says bookings are still good for his modern Japanese restaurant based in Harbour City. "These past few month are surprisingly doing very well but, yes, I can see a drop from this current month as shops around us are closing early," he says. "We are a restaurant that is based on reservations, so it is not much different from before, but I can see that restaurants that depend on walk-in guests are having a difficult time."
There are other bubbles throughout Hong Kong that are not affected, such as Sai Kung, Kennedy Town and the southern districts, as families escape the city and enjoy local restaurants.
One restaurateur in Sai Kung mentioned that his restaurant has been booming in the past few months, but wished it was for reasons other than what the city is experiencing right now.
As for the future, Patel says: "Landlords are still being stubborn regarding rentals so we will wait and watch what happens."