The hospitality industry is under pressure. Specific challenges vary across markets, but the industry is struggling with a combination of cost of living crisis, inflation, difficulties in recruiting staff, and post-Covid lifestyle changes. 

CEO and founder of Beijing-based Hatsune Restaurant Group, Alan Wong, who has been in the business for more than 20 years, calls the situation “total meltdown”. He believes that in the China context the struggles started in Beijing and headed south to Hong Kong “but why HK felt it so quickly was the disappearance of Chinese visitors/spenders”. 

Josh Chu, partner and food and beverage director for Red Sauce Hospitality, which owns Fini’s, Frank’s and Frank’s Records in Hong Kong, agrees that lack of tourism is an issue, coupled with the exodus of expats. Hong Kong additionally faces the issue of ever-rising rents. In addition to introducing new concepts and enhanced communication with customers, Chu says that negotiating lower rents with landlords is important for survival. Investing in people is an important consideration. Given the issues around finding colleagues who are interested in the F&B industry (an issue not unique to Hong Kong), “training and creating a positive culture within our team is key”. 

Co-founder and CEO of Vietnamese restaurant SUSU in Beijing, Amy Li, says that in order to manage costs effectively, they have implemented professional standards and systems. Rather than investing heavily in new locations, they are focussing on strategic collaborations, such as the launch of a new line in a shopping mall to promote their main product, pho, which also comes in at a very attractive consumer price point. 

Iain Ling, who owns a gastropub in Melbourne, highlights lack of foot fall, with many buildings in the CBD below capacity. “The economy needs people in the street and moving around spending small amounts here and there, not just at home ordering shopping and food delivery”. Pubs are quite resilient, he says, as guests have the option of simply ordering a drink, but with many businesses closing down, it is hard to keep motivated in an industry “which relies on energy and welcoming the guests who come into your space”. 

“Many have been trying to ‘ride out’ the COVID impact – and the green pastures we have been hoping for haven’t really arrived” says Keith Sawyer, head wine buyer for Hazel restaurant and Dessous wine bar in Melbourne. He says his venues are being very creative about playing to their strengths. “The first place to look is the rubbish bin!” he laughs “Is there anything there that can be used rather than thrown away?” They focus on back stories, such as knowing the names of the people who catch the fish they serve, and they give oyster shells to “Shuck don’t Chuck” which recycles them for reef restoration projects. “It's all about creating a connection so that guests return”. 


June 14, 2024 — Mark Law