HK bar industry’s experience during Covid-19 outbreak

The Covid-19 outbreak in Hong Kong reached a peak in February and the bar industry was strongly affected. db Asia talked to some insiders to learn about their situation during the epidemic.

Hong Kong’s Soho under the impact of Coronavirus

Few people could ever imagine Hong Kong’s Soho district being a ghost town on a Friday night but that’s how Hong Kong was in early Feburary when the coronavirus panic was at peak.

One of the major reasons for the emptiness of the streets was a result of the local government’s call for people to working from home from late January after the Lunar New Year holiday. Many companies followed the arrangement in order to minimise the risk of community outbreak and people’s concerns over staying in public places.

On the other hand, the city suffered a severe crash in tourist numbers. Owing to the travel restrictions imposed by different countries and the reduction in flight schedules in the first two weeks of February, the daily average of tourist arrival numbers plunged below 3,000 from about 100,000 in January. Even during the period of the SARS epidemic in 2003, the figure was down to 10,000, according to a recent announcement made by The Hong Kong Tourism Board.

“I started my business in 2008 amid the financial meltdown, it was tough; after it was the Occupy Central movement in 2014, our bar business also suffered a lot. But the worst period ever throughout the 12-year business is now,” said Charlene Dawes, managing director of Tasting Group Hong Kong.

With her group, she has founded numerous inventive bars and restaurants including Quinary, one of the World’s 50 Best Bars from 2013 to 2017, VEA, a one Michelin-starred establishment featuring inventive Chinese and French fine dining, and Draft Land Hong Kong, a venture imported from Taipei playing with the concept “cocktail on the tap”.

“In Hong Kong, the operation cost of running bars or restaurants is exceptionally high. Normally speaking, business in this industry is vulnerable due to the lack of sufficient cash flow,” Dawes explained. “During the protests in the second half of 2019, business around Central district turned bad as the traffic was so chaotic in that period and people were concerned about going out late. Whereas, their mentality is very different under the Covid-19 situation – people are reluctant to go out in public places, let alone drink in bars.”

Relying heavily on business workers around Central, Dawes admitted that the reduction in traffic as most people are homebound struck the business hard.

As another insider reflected, the bar and restaurant industry had been looking forward to the local spring events, namely Art Basel and the Rugby Sevens, as they usually receive massive traffic and good business during this period. However, this year they were left disappointed as most major events this spring have either called off or postponed.

Quinary

“The hit is real and the worst ever. After a devastating six months, some of our friends in the industry are already struggling to break even, and here comes another kick in the form of the coronavirus, really not that many business operators can make it for such a long period of time. Also, unlike restaurants, it’s hard for bars to do delivery, so that doesn’t help our business at all.” Dawes added.

Starting in October, the city saw the closure of bars and restaurants. This month, the wave has continued and a few long-standing brands, including Bibo, Ginger Whisky Bar and Jamie’s Italian have shuttered.

The Poet Bar

On the bright side, some people can still find opportunities in the middle of the moribund economy. Harry Lam, general manager of Poet, a new bar in Soho which opened its doors in January this year, said he found the space during the protest movement and was happy with the reasonable rent. As a new bar that still takes customers by appointment only, Lam found the traffic satisfactory and hopefully by the time the epidemic is under control, the operation team will be ready to take on business on a larger scale.

In fact, starting from late February, the business has slowly picked up again as the anxiety over coronavirus has partially diminished, especially in areas populated with expats.

At the same time, to attract customers, bars have been enthusiastic in coming up with tactical creative promotions and collaborations. For example, Honi Honi Tiki Cocktail Lounge is running the RUM N’ ROLL party, where guests receive a free toilet paper roll with every selected drink ordered.

Wine bar ThinkWine, meanwhile, is hosting a series of restaurant takeovers at local fine-dining establishments, such as Frantzen’s Kitchen, Roganic and Ecriture, to offer signature bites in a casual setting. The response to these events has been good, implying that consumers are still keen to go out but are just particularly selective in choosing where.

“It’s not about the pricing, but the quality you can offer,” Dawes said. “As people are not going out as often as before, they need to maximise each dollar they spend nowadays. Business has been harsh for the local F&B industry. What we are working on now is to get our staff on more training and try to get the most out of social media by reassuring our customers. In my previous experience, after the event was over, business did not necessarily bounce back right away. Instead, as people’s behavioural habits may have changed, bars need to keep up their edge and appeal in order to withstand the turbulence.”

To date, there are over 100 confirmed Covid-19 cases in Hong Kong. After a month of “working from home” arrangement, civil servants are gradually resuming working in offices again, followed by many other local companies.

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