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Hong Kong Lunar New Year bounce boosts restaurants, but one owner says he will close outlets because of gloomy economic outlook

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Hong Kong restaurants enjoyed a bonanza over the Lunar New Year holiday thanks to festive events and a drop in the number of people who travelled across the border to eat out and spend.

But Ray Chui Man-wai, the president of catering body the Institute of Dining Art and chairman of Kam Kee Holdings, which runs 42 restaurants, on Monday said he planned to shut down eight outlets this year because of the uncertain economic outlook.

Michael Leung Chun-wah, the chairman of the Association for Hong Kong Catering Services Management, said business had been exceptionally good, especially for Chinese restaurants, which had a full house after a rush of bookings over the past few days.

“At first we didn’t expect to fare well over the Lunar New Year as before that we had only about 70 per cent to 80 per cent bookings,” he told a radio programme.
Restaurants, particularly Chinese ones, enjoyed a Lunar New Year boost to business, members of the trade say. Photo: Eugene Lee

“But over the past few days restaurant bookings suddenly surged with many outlets, especially Chinese eateries, getting a full house and very good bookings.

“During these few days, their business has even been restored to 95 per cent of pre-pandemic levels.”

Leung said the average spend by diners had increased from HK$250 (US$40) to HK$300 a head for dinner and from HK$300 to HK$450 per head for banquets as the industry raised prices by up to 10 per cent to cover rising costs.

He attributed the business boost to a drop in the number of Hong Kong people going to mainland China for shopping and dining sprees.

“More Hongkongers have stayed in Hong Kong over the festive holiday as it is difficult to take their whole family to travel across the border,” Leung said. “They might have concerns about the transport services and overcrowding at border checkpoints.

“The trend of Hongkongers going north won’t last long as this is only novelty chasing behaviour.”

The city recorded an outflow of 1.03 million Hongkongers and an inflow of more than 350,000 mainland visitors between last Friday and Monday.

Hong Kong restaurants set for lukewarm start to Dragon Year despite brisk bookings

That compared with 1.33 million people who left the city at Christmas between December 23 and December 25.

The Immigration Department said it expected 7.5 million trips by Hongkongers and visitors from Lunar New Year’s Eve on Friday to February 17, with 6 million trips made through the city’s land checkpoints with the mainland.

Yeung Siu-lun, the owner of three Iron Cow Taiwanese Beef Noodles restaurants, said his outlets posted satisfactory business over the Lunar New Year.

He added that his Tsim Sha Tsui restaurant had a particularly good showing because of the fireworks display over Victoria Harbour on Sunday, which drew a crowd of 338,000 people, who lined both sides of the water.

“The fireworks display attracted a lot of people hanging out in Tsim Sha Tsui and our branch there had very good business on Sunday,” he said.

People flocked to the area, one of Hong Kong’s most popular shopping districts, for the return of the annual Lunar New Year parade after a five-year break.

On the first day of the Year of the Dragon, an estimated 44,000 revellers were drawn by the return of the annual Lunar New Year parade, lining the streets of Tsim Sha Tsui to enjoy the extravaganza of nine colourful floats and 29 performing groups.

Lunar New Year in Hong Kong: fireworks, parades return for Year of the Dragon

David Leung Chi-wai, the chairman of the Seafood Delight Group, which has 13 Chinese restaurants, agreed with Leung and said his group had a very strong showing for the holiday.

“This is really a surprise for me,” he said. “I never expected the business over the past few days would be this good, even 10 per cent better than last year when all the coronavirus curbs were lifted.”

But Chui said his group’s business was down by 10 per cent compared with last year because of Hongkongers’ changed behaviour, the city’s weakened economy and the continued trend of residents going north to the mainland. He added he would close some of his restaurants as a result.

“This year’s business is worse than expected, with a muted sentiment,” Chui said. “After Covid, Hongkongers have changed their habits, with fewer people paying a new year call and dining out.

“The economy is weak, while a number of people headed north or travelled overseas for the holiday, resulting in people spending less in the city during the holiday.”

Hong Kong restaurant takings went up 26.1 per cent in 2023 from the year before to hit HK$109.5 billion, but growth in the fourth quarter slowed to HK$27.4 billion.

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