Situated in the heart of Asia, Hong Kong stands out as a culinary paradise. Its blend of cultural traditions and global influences translates into a diverse smorgasbord, from classic Cantonese teahouses to Michelin-starred restaurants and a vibrant street food culture.
The Covid-19 pandemic in 2020 devastated the food and beverage industry, and the effects have lingered long after the city reopened to the world. F&B establishments, which number around 18,000, continue to face challenges that require them to adapt and innovate, from the severe manpower shortage to changing consumer preferences and dining habits.
Allan Zeman, Chairman of the LKF Group, believes some issues don’t have a short-term solution. “There has been a big change in consumer spending habits,” said the business magnate. “The Hong Kong dollar has deterred tourists and residents from spending – it is very strong right now, making it a costly city. The new Shenzhen-Zhongshan Bridge and high-speed rail have also made travelling across the border to neighbouring cities easy.”
As spending shifts north and Mainland brands expand in Hong Kong, attracting local patronage has become vital, said Winston Yeung, Chairman of the Hong Kong Federation of Restaurants and Related Trades (HKFORT). “Businesses need to innovate, integrate technology and boost offerings. Promoting sustainability, unique dining experiences and local brands can help rejuvenate the scene,” he explained.
However, there is cause for cautious optimism. Despite the many challenges, the sector continues to showcase resilience and adaptability. According to Government data, the industry continued to recover in the fourth quarter of 2023. Annual restaurant receipts for 2023 were an estimated HK$109.5 billion, just under HK$119.6 billion in 2018 and HK$112.4 billion in 2019. The value of total restaurant receipts increased by 7.5% over a year earlier or by 2.9% over the preceding quarter after seasonal adjustment. For 2023 as a whole, the value of total restaurant receipts rebounded sharply by 26.1%. As per JLL research, restaurant receipts grew by a modest 2.3% year-on-year in the first quarter of 2024.
Further recovery in inbound tourism is expected to benefit businesses, supported by the Government’s various measures. Last month, the Hong Kong Tourism Board (HKTB) launched “Summer Triple Rewards” for overnight visitors as part of the Summer Chill Hong Kong campaign. Each reward set contains spending coupons for dining, retail, and transport/sightseeing, with discounts on purchases up to a value of over HK$500. The dining voucher is worth HK$100 and is valid upon spending HK$200 or above at more than 1,000 designated restaurants. HKTB has also invited popular Japanese travel YouTubers to visit the city for a “Seeing is Believing” experience, from shopping and tourism to F&B offerings.
Dishing Up New Deals
Hong Kong businesses are rolling out all kinds of promotions to keep their cash registers ringing. Cafe Deco Group's Airside Cafe in Kai Tak, which opened last year, has launched happy hours to attract people who want to wind down after a long day at work, while Pho.dle.bar in Tsim Sha Tsui is offering discounts on takeaway food items.
“On top of high rental and manpower costs, the dining business in Hong Kong has been affected by the trend of Hongkongers travelling to Shenzhen,” said Cafe Deco Group CEO Angelo McDonnell. “This has slightly affected our group as well, especially over long weekends.”
McDonnell said offering a quality dining experience with reasonable prices and good service was important to win customers’ hearts. “The goal is to build long-term customer relationships. We have also revamped our loyalty program, Cafe Deco Group Privilege (CDGP), with a 5% discount for Red Card members (free registration). Our VIP customers can earn CDG dollars when they dine with us or redeem for dining vouchers.”
According to Paul Hsu, Executive Director and Founder of Elite Concepts, the lack of nighttime entertainment is leading to a decline in late-hour dining and second-seating dinner guests.
“To stimulate recovery, we have to implement strategic measures. First, food offerings can be enhanced with innovative and diverse options to attract more patrons. Second, a vibrant and engaging night entertainment landscape is necessary to nurture Hong Kong’s nightlife. By providing compelling entertainment experiences, people will be motivated to venture out and indulge in late-night dining experiences again. But an improved business environment is the ultimate driver for this change.”
The company is innovating menus across its portfolio of restaurants, catering to evolving preferences by incorporating seasonal ingredients and cultural elements. Its guest loyalty program, Elite Access, offers special incentives and personalized promotions to foster repeat visits and guest retention.
At Café de Coral Group, the focus is on digitalization and automation to build brand affiliation, enhance customer experience and increase productivity.
“Digital kiosks, mobile ordering apps and e-commerce platforms have generated significant online sales,” said CEO Piony Leung, adding that customer rewards and incentive programs have been introduced to offer personalized experiences, as well as various flash promotions throughout the year to drive transactions.
“We are also broadening our menus, effectively targeting new, younger customer segments with innovative products like meat alternatives, high-protein and low-carbohydrate options,” said Leung. “By addressing emerging customer trends, we can stay relevant and deliver exceptional, differentiated services that truly resonate with our customers in the F&B market.”
Adding International Flavour
Hong Kong continues to attract numerous F&B events, as well as overseas investors and gourmands. August and September, for example, are packed with prominent trade shows, such as Asia Fruit Logistics, HKTDC Food Expo, Hong Kong International Tea Fair, and the Hong Kong International Wine & Spirits Fair, to name a few.
In July, Asia’s 50 Best Bars held its ninth edition in the city, where Bar Leone toppled another Hong Kong watering hole, three-time winner COA, to take the top award. In February, nine Hong Kong restaurants were added to the Michelin Guide Hong Kong and Macau, bringing the city’s total to a whopping 79. French fine-dining restaurant Cristal Room by Anne-Sophie Pic – the world’s most decorated female chef with 12 Michelin stars across her restaurants – opened in Central last autumn. Six of Asia’s 50 Best Restaurants are in Hong Kong, not to mention world-renowned brands like The Macallan House and Gokan by SG Group.
“These significant investments testify to confidence in Hong Kong as Asia’s premier culinary hub and luxury destination,” said Sindy Wong, Head of Tourism and Hospital at Invest Hong Kong. The government department, tasked with attracting foreign investment, has helped many international restaurants set up in the city, including British chef Matthew Ziemski’s Swiss-Italian concept Nocino, which opened this year in Tai Hang.
The number of F&B operators from China in Hong Kong is also growing, thanks to the city’s Top Talent Pass Scheme. Zeman revealed that The LKF Group was reaching out to many Mainland brands and trying to attract big names. “We need to cater to our new customers and have unique and special experiences to bring new energy to Hong Kong,” he said.
Ingredients for Success
The Government recently launched a hospitality campaign across all service industries, including catering, hotel and retail, to reinforce the city’s image as a tourist-friendly destination.
“Besides international visitors, expectations and standards in the industry are high among Hongkongers, who are savvy and well-travelled,” said McDonnell. “Cafe Deco Group provides different training programs for colleagues to improve our service standards. As restaurateurs, we are also learning daily and improving to cope with the ever-changing dining scene.”
Nikki Ng, Chairman of the Chamber’s Retail & Tourism Committee, said that as consumer preferences evolved, there was a growing interest in innovative F&B trends and immersive cultural experiences, which offered a chance to leverage Hong Kong’s unique, locally inspired dining offerings. To better address the evolving demands of the market, some industry players are already embracing innovation, collaboration and digital solutions.
“This is encouraging to see, as proactive steps demonstrate a forward-thinking approach that can contribute to the progress,” she said. “By leveraging our vibrant local culture and fostering collaborations with international and Mainland brands, we can create a diverse and dynamic F&B landscape.”
Hong Kong can also host top-notch events to enhance its international reputation further and boost restaurant receipts. Zeman said the Government could consider paying promoters to attract big names, as Singapore had done to secure superstar Taylor Swift’s performances. “Investment would be worth it to make a splash and reintroduce Hong Kong to the world. We really need to go first class.”
In Yeung’s opinion, promoting sustainability, unique dining experiences and local brands can help rejuvenate the local F&B landscape. “With the joint efforts of the Government, industry and public, we can tap Hong Kong’s culinary diversity, service excellence and resilience to map a new course.”