Coronavirus: 70 per cent of Hong Kong restaurants face closure during Covid-19

  • The fourth wave of the pandemic has lead to greater social distancing measures and hit the already struggling industry hard
  • While the government has promised financial aid, many restaurants still face layoffs
South China Morning Post |
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Between September and November, the unemployment rate for the food and drink sector stood at 13.1 per cent. Photo: SCMP/ Dickson Lee

In a recent poll, about 70 per cent of Hong Kong restaurants said they face closures in the next three months amid stricter social-distancing measures rolled out to fight the fourth wave of the coronavirus pandemic.

The Institution of Dining Art said on Tuesday a similar percentage of respondents also planned to lay off staff in the coming quarter.

The industry body surveyed 136 catering businesses in mid-December and found 19.9 per cent of them had either closed or were facing the threat of closure. The findings showed that some businesses might not survive till the Lunar New Year in February.

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Association chairman Ray Chui Man-wai said the sector’s biggest challenge was the social-distancing measures imposed on catering businesses amid the fourth wave of coronavirus infections.

Restaurants are now running at half their capacity and can only serve up to two people per table, with dine-in services banned between 6pm and 5am.

“During the first and second waves, there were some takeaway businesses that helped compensate for our losses … But in the fourth wave, we don’t have many takeaway orders. This is a fatal factor,” Chui said.

A year of the coronavirus has had a major impact on Hong Kong's dining industry. Photo: Bloomberg

He felt residents had become accustomed to the “new normal” amid the pandemic, and some people had stored a lot of ingredients at home so they could cook on their own.

In the next three months, 70.6 per cent of respondents said they faced the risk of closing down, while 73.5 per cent had plans to lay off workers.

More than 16 per cent of the surveyed businesses already laid off 20 per cent of their staff while nearly 10 per cent had slashed their workforce by 30 per cent.

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Last week, the Legislative Council passed HK$6.4 billion in financial aid for businesses hard hit by the health crisis. The catering industry will receive HK$3.4 billion for 17,000 outlets. Depending on their size, restaurants will receive between HK$100,000 and HK$500,000 each.

Chui welcomed the assistance, but said the subsidies offered during various waves of the pandemic only put them on a drip, merely ensuring they did not have to close down immediately.

“We can’t see a ray of hope yet,” he said, urging the government to further improve a full loan guarantee scheme by raising the borrowing limit from HK$5 million to HK$10 million.

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