The number of licensed restaurants in Hong Kong has dropped year on year for the first time in six years, a South China Morning Post analysis has found, with experts attributing the decline partly to locals travelling to mainland China and tourists preferring lighter food options such as street snacks.
According to data from the Food and Environmental Hygiene Department, 17,154 restaurant licences were valid as of the end of April, a drop of 255 from the same month last year.
A comparison of licence numbers revealed 2,034 restaurants closed in the past year, while only 1,779 were newly issued.
This marked the first year-on-year drop since the pre-pandemic period, with the number of restaurant licences increasing by an annual rate of 2% to 4% between 2019 and 2022. The growth slowed to about 1 per cent in the following two years.
It was also the tenth consecutive month of year-on-year net decline, a trend that began last July.
"We attribute this decline partly to the increasing tendency of Hong Kong residents to travel northbound, particularly to Shenzhen," said Cathie Chung, senior director of research at JLL in Hong Kong.
"The geographical proximity and more diverse, cost-effective retail offerings in the regional market are drawing local consumers away from Hong Kong's food and beverage scene."
Chung also noted that from 2018 through to 2024, fast food shops and miscellaneous eating and drinking places have gained an increasing share of total restaurant receipts.
She attributed the trend to the changing consumer behaviour, particularly among inbound visitors who had a growing preference for light refreshments, confectionery, street snacks and local culinary experiences.
Data showed that the number of light refreshment restaurant licences experienced a smaller year-on-year decline of 0.4% over the past year, compared with a 1.8% decline for general restaurant licences during the same period.
The analysis also showed that Yau Tsim and Central-Western experienced the biggest net decline, with both losing 40 restaurants as of April compared with a year ago.
Even though the entire city recorded a net decline in the number of restaurant licences last year, the current total remains higher than pre-pandemic levels, when only 15,519 licensed restaurants existed as of April 2019.
Among the restaurants that survived the pandemic was one in Tai Mei Tuk village run by Albert Wong, a 61-year-old chef who used to work in Central's bar and restaurant Sevva. He said he was convinced by his daughter to open a family restaurant in 2021.
But, like many others, the entrepreneurial plan was hit hard by another wave of Covid-19 outbreaks in early 2022, and the restaurant failed to make a profit for a long time following the high cost of the initial renovation fee of the village house.
"I was very disappointed at the beginning. For almost three years, it was very, very hard to run the restaurant," Wong said.
The chef, who once led a team of kitchen staff, now had to do everything by himself to control costs without risking food quality, including taking a minibus to the market to select ingredients and looking for discounted prices before closing time.
Wong insisted on having high-quality ingredients and innovative original recipes, saying this approach was the only way to leave a lasting impression on customers and have them share their positive experience with others.
"I am very proud to hear that my customers complimented that my food tasted better than some star hotels, but they paid so much less," he said.
The strategy proved effective, and with publicity from some YouTube channels, the 28-seat restaurant recently received more than 1,000 phone calls for bookings each day, forcing them to pause them for now.
When asked if he felt it was worth it, Wong said the business had just started to improve and that everyone in the family had worked hard to reach this day.