Restaurants serving locals keep up sales amid drop in tourist spending

Restaurants have fared better than high-end retailers amid a reported decline in tourists' spending, an insider in the food and beverage business says.

Strong local demand boosted the restaurant sector, saving it from the slide in sales experienced by luxury retail brands amid President Xi Jinping's anti-corruption drive on the mainland, Yeung Wai-sing, chairman of the Association for Hong Kong Catering Services Management, said yesterday.

Nevertheless, the industry was struggling with surging labour costs and sky-high rents.

"The rents are not going up further, but we are still paying the high rents committed to in three-year contracts signed earlier," Yeung said.

In the first half of this year, restaurant revenues rose 3.6 per cent despite a 0.8 per cent drop in customer flow. In comparison, retail sales dropped 1.3 per cent by value and 1.1 per cent by volume, government figures showed.

The total value of receipts in the restaurant sector in the second quarter was HK$24 billion, up 3.7 per cent over a year earlier.

Business volume fell 0.9 per cent, reflecting reduced customer flow.