HK Restaurants Burdened By High Rents, Labor Cost

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Last updated at: (Beijing Time) Wednesday, January 02, 2002

HK Restaurants Burdened By High Rents, Labor Cost

Restaurant owners in Hong Kong find it difficult to sustain their business with the city's high rental price, especially under the current economic situation, according to William Mark, president of the Federation of Hong Kong Restaurant Owners.

In addition, during the past eight to ten years, most employees enjoyed a double digit growth in salary and the higher labor cost has led to a great burden for restaurant owners, he said.

"The main costs in running a restaurant include rental, salary, and food materials, with the last item accounting for a smaller percentage," said Mark.

"The contraction in the market, together with the price war, has made the operating environment for the food industry disastrous, and certainly some restaurants which are less competitive will be kicked out of the game," he added.

At present, Hong Kong has 8,000 to 10,000 restaurants and the total receipts from restaurants in 2000 amount to 57.9 billion HK dollars (7.4 billion U.S. dollars), an increase of 2.1 percent from 1999.

The food industry continues to be one of the main attractions for overseas tourist in Hong Kong. According to the Hong Kong Tourism Board's survey, visitors spent about 8.47 billion HK dollars (1.08 billion U.S. dollars) for meals in Hong Kong in 2000, excluding meals taken in hotels.

The number of restaurants in Hong Kong at present is more or less the same as in the past few years. As big restaurants closed down, smaller ones are opened to replace them, Mark said.