Floating restaurants feel pinch as slump bites

PUBLISHED : Sunday, 15 March, 1998, 12:00am
UPDATED : Sunday, 15 March, 1998, 12:00am

ABERDEEN'S Jumbo floating restaurants - a tourist icon - are losing money for the first time and owners admit lay-offs are a possibility.

The giant three-restaurant complex has long relied on package tourists from Japan and Europe for the bulk of its trade, considered one of the most lucrative in the business.

'It's been terrible in the last few months and we have no choice but to review our options,' said one director of Stanley Ho Hung-sun-controlled Melco International, the listed firm that owns the seafood restaurants.

'For the first time in 22 years we are not covering operating costs. The very last few weeks have been just a little bit better. Unless this continues we will have to make changes.

'No final decisions have been made.' The three restaurants - Jumbo, Jumbo Palace and Tai Pak - together seat nearly 5,000 diners and open seven days a week.

Until recently, they regularly packed in more than 4,000 nightly. Now they struggle to fill more than 3,500 seats on a big night.

They employ more than 400 staff full time, with salaries accounting for 66 per cent of operating expenses, according to the 1997 Melco annual report.

Turnover has been slight and many have worked there for years.

Profits before tax are listed at $70.7 million - a rise of $55 million on the previous year when the firm spent more than $15 million to ensure water and supplies were cholera-free.

'We all live in envy of the Jumbos,' one Causeway Bay restaurateur said.

Tourist arrivals have been plummeting since the handover, with July and November recording drops of 35 per cent and 22 per cent respectively, on 1996 figures. Japanese trade has been particularly hard hit.