President of the HK Federation of Restaurants and Related Trades, Simon Wong Ka-wo. (PHOTO PROVIDED TO CHINA DAILY)

President of the HK Federation of Restaurants and Related Trades, Simon Wong Ka-wo says restaurant receipts might have increased 15 percent from their December peak in 2018. But things aren't looking too good for the industry going into the Chinese New Year, under the threat of a new COVID-19 variant.

Check out the full transcript of TVB’s Straight Talk host Dr Eugene Chan’s interview with Mr Wong.

Chan: Good evening and welcome to Straight Talk. I’m your host Eugene Chan. Our guest tonight is Mr Simon Ka-wo Wong who is the chairman of one of the well-known food and beverage manufacturing companies in Hong Kong which is also involved in restaurants, e-commerce and hospitality. He comes from a family that has been in the F&B industry since the 1930s so he would have gone through the different cycles of the industry. Tonight, we have invited him as chairman of the Chamber of Food and Beverage Industry of Hong Kong to share with us how he and other members of this industry have survived the unprecedented challenges of the last 2 years and the outlook for the future. Welcome Simon

Wong: Hello, Eugene. Thank you for having me.

Chan: Yes. As I just mentioned, you have been in a family that has been with the F&B industry for nearly 80 or even 90 years. You may have gone through all the good and bad times of the industry in Hong Kong. Maybe you can share with the viewers, how good were the very good times. And when was it? or still is now?

Wong: Wow... talking about the good times. Well, if we are talking about after SARS time, we are having some very good times since then. At the moment, because of CEPA, a lot of companies or enterprises from the mainland came to Hong Kong, and we have the free flow of traveling from the mainland to Hong Kong. So at that time, we enjoyed a very good growth in our economy, particularly for the catering industry, quite a number of restaurants opened at that time. And until 2018, we also recorded the best year in history for Hong Kong's catering industry.

Chan: Right. So what you are saying is that in the last 20 years, mainly the good times were mainly post-SARS until maybe before the riot.

Wong: Before the riot, yes, yes.

Chan: And, you know, a casual conversation we often hear, owning a restaurant is a very glamorous life because usually you go out and eat, you have your friends. Is that a good way to get rich?

Wong: Oh, come on. Well, it's not easy to operate a restaurant. Because we have to deal with many different policies. And also, we have to face a lot of difficulties in our trade, because we have to deal with people, we have to deal with food costs and obviously, we have to deal with rental increases. So this is the three dimensions that we are on… you know, feeling very difficult to deal with.

Chan: Right, Simon? Apart from that, I mean, I hear from friends who have been in restaurants saying that they're very tied down to the business, long hours, no holidays, but have a lot of cash flow. Is that true?

Wong: Well, of course, you get a lot of cash in, but you also have to pay out a lot of things, including, just as I mentioned before, you employ people, then you have to pay their salary. And because of the rental increase in the past 20 years, you know, we have to pay a lot of rent. And probably the real estate companies are the only industry that will be benefited. But having said that, when we see that during SARS time, our number of restaurants has come down to about, well, less than 9,000 restaurants.

Chan: Really?

Wong: But in recent years, the number of restaurants has gone up to almost 17,000, close to 17,000. 

Chan: Wow. Nearly doubled.

Wong: Nearly doubled.

Chan: We talked about the good times. Let's talk about the bad times. Let's not talk about the COVID or the riots. Has the F&B industry ever had bad times? Everybody has to eat, right?

Wong: Well, everybody has to eat but the thing is, we also encounter a lot of difficulties like we have food poisoning issues. We have… you know... when the downturn of the economy worldwide is also affecting us. And we also see that if tourists didn't come to Hong Kong, then we would also suffer in some way. And you see that the catering industry needs people to come out to eat, and we also, you know, entertained about 16 million tourists coming to Hong Kong in the past years. But then, like last year, we don't have any tourists coming to Hong Kong. So our business has dropped since then.

Chan: Let me ask you, basically, in the last 20 years, things have been quite good, but also face the challenges as most persist... I was just, I was just kidding, saying that you make big money. I'm sure every industry has its own difficulties. But how about if we talk about the riots and the COVID? How bad has it hit the industry? How bad has it been?

Wong: In 2019, in June actually, we see that our business has been affected greatly by the riot. Before that time, actually, we still enjoyed the first five months of business growth. But after that, for the next seven months, our business has dropped by $17 billion, for that seven months. So overall, in 2019, our business turnover has come down to about 10... by 10 percent.

Chan: Right? Yes, and just now you mentioned we have nearly 17,000 restaurants in Hong Kong.

Wong: Yes.

Chan: How many have closed permanently?

Wong: Well, in 2019, about 400 restaurants have been closed. And actually, the worst time is in 2020. Because of the COVID, about 2,500 restaurants have been closed down. And we also see that the unemployment issues have been affecting us so badly, and a lot of employees in our catering industry have been laid off, or they don't have enough work. So, this is a very difficult time.

Chan: So even if the restaurants still keep open. I'm sure some of the staff have to be laid off, or even reduce their salary. Yes. So which sector is the hardest hit, are they the cafes or the top-end restaurant or? Or the mid-range, which is the most affected ones?

Wong: The most affected ones are the big Chinese restaurants that hold banquets.

Chan: Right, those are the hardest hit?

Wong: Yes. Because well, during the COVID period, you know, we have the social distancing measures. We even have what we call the ABCD categories of restaurants. And before this year, you know, there were measures that at some time there were only... Well, we can only allow four people to sit at a table. This would hurt the Chinese restaurants very much, because they cannot do wedding banquets, or, you know, a large crowd of social gatherings.

Chan: Simon, as president of the Federation of Restaurant & Related Trades, you said in a recent interview that all the booking up until Christmas was fully booked. And I assume the same for the New Year that has just passed. Do you expect the same trend will happen in Chinese New Year?

Wong: While it won't be that good for the Chinese New Year, as I see that the government has rolled out the e-voucher, you know, since August 1 and then in December, actually December 9 is the last roll out of the e-vouchers. This actually helped the economy to recover, especially helped the consumer industry to recover. People want to come out and eat and dine, you know, and yeah.

Chan: I want to also ask you that we read in the newspaper, I'm sure our viewers do read a lot, that the supply side of food and transportation, have all been under a lot of pressure. Has it increased the cost of your industry?

Wong: Oh yes. For the past three to six months the food cost has increased by about 15% on average.

Chan: How about the price of dishes when we go out? Will the prices increase?

Wong: The price has also increased. Particularly in December when we have a lot of people coming out dining, you know, the food costs obviously would come up. And we see that the average cost or average ticket costs for consumers has jumped up by about 15%. But then, you know, strangely, people seems to be used to the price increase, they would accept…

Chan: They still want to come out to eat. So you are predicting the catering industry to reach $11.5 billion this month, compared to $10 billion in 2018? Do you expect a trend of people spending money will still continue in 2022? I mean, I know that Chinese New Year may be a bit tough, but in the next 12 months, are you confident?

Wong: Well, for the next 12 months, we are facing a lot of challenges. And we are also looking into whether the government would help the industry, particularly the catering industry, to sustain the business. Because, as I said, the e-voucher actually helped the industry's business. But we have been talking to the Financial Secretary, whether he would also roll out the third round or the fourth round of the relief fund.

Chan: Right. Okay.

Wong: See what he can do.

Chan: Let's see what he will do. Okay, we will go for a break and don't go away.

Chan: Welcome back. We have been talking to Mr. Simon Wong, who has been sharing with us the huge challenges the F&B industry has had to face over the last 2 years. So Simon, before the break we were talking about all the challenges, but I am sure the viewers would want to know that we have this vaccine bubble…

Wong: Yes.

Chan: How has that been affecting the business? I mean we have your “ABCD”, I mean people getting used to different terms now. Has it helped or has it not helped?

Wong: Well, in fact the ABCD types of restaurants that the government designed has helped to fight the pandemic.

Chan: Right.

Wong: And in some way we accept this idea and we try to push hard for our frontline people especially to get the jabs. And right now we have over 80-85% of our employees have already been vaccinated.

Chan: Right.

Wong: But the government is talking about having the vaccine bubble extended across all types of industries or listed premises before Chinese New Year. And what we can do is while we would try to accommodate the government’s policies and see how we can push all our employees to get vaccination. But the thing is we are also worried about some other issues, for example the elderly people, they might not be able to use the…

Chan: The phones.

Wong: The phones, etc. And they might be difficult to go into the restaurant without showing their vaccination records. So in this case, we will discuss with the government on how to give us some more guidelines about doing that.

Chan: Simon, I have got a personal question for you because we are in public services, we do come out to eat, and very often we don’t leave the premises until early hours in the morning. But for the last 2 years, because of COVID, everything has been shut down, and people having dinners finished by 10pm. So does the type D businesses, if you open up after 12am, with 12 people, are people used to coming back to spend time at the restaurants again, compared to before? I want to know.

Wong: Yes, obviously. When we have more restaurants becoming type C and D, that means for type C we can allow people to sit in tables with 6 people, and then for D type we can allow 12 people. And then with total limit of customers for type D with 240 guests. So in this case a lot of banquets come back and that actually saved the Chinese restaurants quite a bit because before they don’t have… virtually no people business at all.

Chan: You know we have that LeaveHomeSafe app that we have to show to go in. Honestly, has it stopped people from coming?

Wong: No. Before some restaurants owners worried about the mandatory LeaveHomeSafe app would stop people from going into restaurants and their business might be dropped by 30%, that was their worry. But when we see the figures in December, we see that actually our business in the December has increased by… it’s even better than 2018 business. So the LeaveHomeSafe app doesn’t affect our business at all. In fact I see that people are more willing to use the app and it’s more convenient. And when we see that some people are reluctant to use the apps and they still want to use the delivery services for their food or meals, then it’s their choice.

Chan: Right. Simon, from what we have discussed so far, the government’s vaccine bubble, the LeaveHomeSafe app, even the consumption voucher that you just mentioned, or even some subsidy schemes for staff, everything has helped. So the government is doing the right thing for the first time.

Wong: I would say so. I actually praised the government, including Carrie Lam and also Paul Chan, for rolling our these kinds of policies to us.

Chan: So do you want them to do more at this stage? Or do you want them to keep the (fiscal) reserve just in case we have another big wave, like the Omicron coming up?

Wong: Well, when we see that the government still has a lot of reserve in the treasury. And talking to the Financial Secretary, Paul Chan, whether he would roll out another round of… or continue the relief program in 2022, because when we see that once the consumption voucher has been stopped, seems that the buying power has also been relaxed a little bit. And I don’t know if the business would sustain for the whole year of 2022. And also we are very worried about the coronavirus variant because Omicron seems that…

Chan: Very infectious.

Wong: …it’s getting into the community.

Chan: We will talk about that in a minute. But before we move on to that, I want to ask you, your personal view, I mean I am not going to hold you to it, so far we said the government has been doing quite a good job.

Wong: Yes.

Chan: And there has been recent talks of actually before Chinese New Year, they are going to put in even more social-distancing measures, like the vaccine bubble, even further. That means if you haven’t got vaccinated, basically you just can’t walk into a list of places, as you have said. Are you confident that the businesses are still going to strive?

Wong: Well, when judging from the last 2 days’ or last few days’ record, more people, especially the elderly, are going to get the jabs. And that would also help increase vaccination for whole population. And if the population have about 90% of people getting vaccinated, then we are confident that we can overcome the pandemic. And so we are not too worried about for the economic growth in 2022. And especially when Mr. Paul Chan, the Financial Secretary, said that… last year we already enjoyed 6.4% in GDP growth, and in the coming years, we are still having the upward trend on that. 

Chan: We are going to ask you that looking at some future challenges, see, with SARS, we have a lot of restaurants coming up, people getting more health conscious, I think your business you have developed more organic food.

Wong: Yes.

Chan: And now, with this new normal as you always call it, that people starting to eat from home, with takeaway and all that. How long do you think this new normal will be? And will this become a real normal?

Wong: The norm will be changed for our daily life, especially for the catering industry. When we see that in the past 2 years, large restaurants have been closing down, a lot of smaller restaurants have been opening up. In terms of the number of restaurants, we see that actually it has surpassed the number before COVID. This is very strange but when we see that those restaurants are… actually are quite small restaurants only operated by 2 or 3 or 4 people, and the size is very small. But then we are looking ahead in 2022, we are facing a lot of other challenges, especially for the shortage of manpower. In our industry, in the past months, we have been trying very hard to recruit members to come back to the industry. But during the pandemic period in the past few years, since a lot of the restaurants have been closing down and people had been laid off, before they were restaurant people, but then they have changed their jobs, to security, to… in other industries.

Chan: So you are saying that, with this new normal, I mean we got new ways of ordering food, new way of packaging, as you know some of the restaurants, even Michelin Star restaurants, they can do takeaways now. Do you think people would get accustomed to this new taste of food that they don’t want to go back to restaurants and enjoy anymore?

Wong: Well, for people in Hong Kong, I think we still want to eat good food. We have our requirement. And for delivery service, of course, you can feed yourselves. But you cannot enjoy the type of…

Chan: The company or the ambience, yes.

Wong: Of course, this is the difference.

Chan: Simon, in the last part of the show, I know you are an Election Committee member.

Wong: Yes.

Chan: You know that in less than around 80 days, the next Chief Executive will be elected, in the end of March. What would be your wishlist for the potential candidate from your sector?

Wong: From my sector, of course we want our economy to be back and so our business will be recovering.

Chan: How would you want them to do it?

Wong: First of all, we would want the new government to roll out some kind of programs to us. Like before, during the pandemic time, Mr. Paul Chan also rolled out the relief fund.

Chan: Right.

Wong: And in the future, I think the government has to focus on the economy, as well as how to help the businesses to grow, not only in Hong Kong, but also in the Greater Bay Area.

Chan: How would you encourage young people to go there?

Wong: We have to take them to see actually the GBA area, otherwise if they only listen they won’t experience the type of things we want.

Chan: Thank you for coming, Simon, to share with us the inside story of the very tough journey that the F&B industry has had to take over in the last 2 years. I am sure our viewers would be most keen to support our restaurants and we all look forward to dining out at Chinese New Year without fear. Thank you all for watching. Have a good week. And good night.