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Hong Kong economy

Cutting red tape seen as fix to make struggling Hong Kong food trucks tastier money makers

Review of tourism initiative revealed most venues struggled to make money for vendors as customers had little appetite for the scheme

PUBLISHED : Friday, 26 January, 2018, 4:40pm
UPDATED : Friday, 26 January, 2018, 11:10pm

Tourism officials will get rid of more red tape to boost a flagging food truck pilot scheme in Hong Kong, the government has announced.

Approaching a year since its launch, an official review of the two-year tourism initiative released on Friday revealed most venues struggled to make money for vendors as customers failed to find an appetite for the mobile street food businesses.

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The review report showed the food trucks’ revenue from the most and least popular selling sites could have a 500 per cent difference and the bestselling items were mostly local delicacies priced at around HK$20 (US$2.56).

The Tourism Commission concluded that more food truck sites could be rolled out and approval would be given for operators to serve more one-off and annual events as part of a fix.

The two-year pilot scheme to operate food trucks at popular tourist venues started in February 2017 at eight sites spread among 16 vendors.

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However, significant start-up costs for truck owners, stringent rules and regulations plus a lack of sales at some venues saw at least three operators bow out in less than 12 months, questioning the viability of the initiative.

In official figures released by the government for the first time, data up to December 24 showed a fivefold difference between the top-selling site, Hong Kong Disneyland – HK$10.3 million – and the next popular venue, Tsim Sha Tsui Art Square – HK$1.95 million.

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The least popular site was the Energising Kowloon East venue, earning just HK$460,000 or a 20-fold difference in earnings with Disneyland, among the operators through the period.

The concept of the scheme saw two food trucks designated a venue on a rotational basis. Sites included Hong Kong Disneyland and the Ocean Park theme park but vendors quickly raised concern about the lack of sales at some spots.

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A reliance on Disneyland sales to prop up the sales of some vendors would raise concern about the viability of the scheme as the data indicates most vendors operate a truck at a loss through the year when they are not trading at the top selling location.

Five of the unnamed operators made between HK$1 million and HK$1.5 million up to December 24. Three operators made between HK$2 million and HK$2.5 million.

According to the figures, and the lowest earning bracket, an operator may have made just HK$3,086 a day before rent, staff, supplies and operational costs were included. The earnings did not reflect start-up costs of up to HK$1 million per food truck operator complying with numerous regulations.

A Tourism Commission spokesman said: “We have been continuously providing appropriate relaxation for the scheme to reduce restrictions and enhance operation flexibility.

“In the coming year, the TC will continue to closely monitor food trucks’ business performance to determine the way forward after the pilot scheme.”

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Operators like Pineapple Canteen found its HK$20 pineapple bun with fresh cream and dried pineapple was the bestselling item. Beef & Liberty’s HK$68 “truck burger” was its biggest hit.

A government survey on food trucks found 28 per cent of 378 respondents said the food prices were “quite high”. Other reasons for not buying food ranged from it being “ordinary” to “unattractive”.

Jonathan Glover, founder of the Butchers Club burger chain, said the changes announced by the government were a “step in the right direction”.

“Hopefully we will be able to have more meetings with the Food and Environmental Hygiene Department and the Tourism Board to make it ‘even more flexible’ going forward,” Glover said, whose truck venture started in October after rival vendors pulled out, citing difficulty making money.

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So far, for the Butchers Club, sales had been “slightly better than what we expected” but its experiences were based on a limited number of locations, mainly the most popular including Disneyland and outside the Science Museum in Tsim Sha Tsui.

“We’ve had a good run. For us, we are using this truck to promote our wider business ... but the bottom line is whatever we do, we have to be profitable,” said Glover, stating that making a loss was not part of his business plan.

“I believe it will only get better as the government relaxes, and hopefully the government finds more suitable venues so it will be better for everyone.”