Hotel / Catering

Appetite for growth in the catering sector

by Wing Kei

David Ng, president, Hong Kong Federation of Restaurants & Related Trades

Restaurant business has bounced back since the dark days of 2003

Virtually every campaign promoting Hong Kong makes mention of the city's diverse international cuisine and unlimited opportunities for eating out. There is no doubt that, when it comes to dining options, tourists and locals are spoilt for choice, but those in the industry sometimes feel their contribution to the economy is not fully appreciated.

"The catering sector remains a key service industry for Hong Kong and now employs a workforce of more than 200,000," says David Ng, president of the Hong Kong Federation of Restaurants & Related Trades. "Any restaurant involves significant investment and a lot of hard work and irregular hours for both staff and management."

This includes individuals from all kinds of backgrounds who will be working as waiters, chefs, kitchen staff, accountants, front-office managers and even logistics specialists. "Whatever their position, employees must be hard-working and good team players," says Mr Ng. "Restaurant operations require close cooperation between colleagues and mutual support." On a practical level, language skills are also becoming more important in order to interact with more tourists from the mainland and all around the world.

These visitors are partly responsible for the expansion of the catering industry from around 19,000 restaurants in 2003 to approximately 20,000 today. "If things go well in this business, you can make a fast return on investment," says Mr Ng. "In a city like Hong Kong, with a population of seven million, and where people are used to eating out, there is always potential to do well when the economy is strong."

Nevertheless, he points out that the sector must still strive to improve overall standards of performance and focus on the need to remain competitive. In many cases this comes down to introducing more effective management strategies and better cost control.

Tighter regulations

Mr Ng believes that restaurant operations are now highly regulated. For example, they are subject to strict inspections relating to food and environment, fire safety, public health and hygiene. Arrangements for waste and sewage, engineering and electrical installations also have to be checked on a regular basis. Some restaurant owners have the impression that there are just too many separate regulations and that there is room for rationalisation.

"We have to comply with all the regulations and pass the tests set by different government departments," notes Mr Ng. "If there is a problem, restaurant owners face additional expense to rectify things and may also face financial penalties." His hope is that tougher measures are not applied across the whole catering sector in cases where just a handful of operators are failing to observe the rules. He notes that it is important to strike the right balance between dealing with restaurants which don't meet hygiene standards, and promoting a healthy business environment for the whole catering sector.

Promoting status

The federation's role is to facilitate communications between the government and restaurant owners. It also helps to promote the status of the catering industry and encourages members to visit restaurants overseas to learn and to pick up new ideas.

"Actually, the government is not doing enough to try to understand the challenges the catering industry is facing, including fines, suspension of licences and possible imprisonment," Mr Ng says. These are in addition to the difficulties caused by higher operating costs. "Rents are rising in Hong Kong and starting salaries for staff are going up as well. Other costs have also been moving up, but customers are looking for restaurants at affordable prices," he adds.

Mr Ng says that demand for good restaurants is still strong. However, cost factors mean that not all of them will necessarily be able to remain in business. "With so many people employed in the sector, the government should do something extra to encourage development," he notes. "A better business environment for restaurants could definitely help increase overall employment."

At the table

  • Around 20,000 restaurants now operating in Hong Kong with a combined workforce of over 200,000
  • Increasing costs and tight regulations are creating pressures for restaurant owners and managers
  • Industry view that more could be done by the authorities to promote development of the sector

Taken from Career Times 19 May 2006
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