According to the government, the consumer price index last month was 3.2 percent up on the same month last year.

"Our industry was smacked in the face twice this year," said Anthony Lock Kwok-on, managing director of California Red - a karaoke chain with 16 stores. "The first smack was the smoking ban implemented earlier this year. The second is rising costs."

Lock said California Red will conduct a price review next month. It is likely to raise its price, but the increase will be no more than 8 percent, he said.

Currently, customers spend an average of HK$135 each on weekdays and HK$180 on weekends.

"We lost 30 percent of our business after the smoking ban went into effect," Lock said. "We are recovering from the loss by exploring new markets other than young people, but rising costs for raw materials and labor have put us under a lot of pressure."

Overall operational costs have increased by 10 percent since last year, with the cost of cooking oil rising from HK$170 a jar to HK$230.

Most karaokes now provide food services and, according to the latest CPI, rice is up 10.7 percent, beef up 30.9 percent and eggs up 31.4 percent.

Other senior managers of the chain have reported difficulties in hiring staff since the unemployment rate is now at a nine-year low of 3.9 percent.

Lock said the chain now needed to offer higher salaries to attract staff.

"Some of my colleagues told me in the past hundreds of people used to line up for interviews at recruitment fairs," Lock said. "Now they need to almost beg people to apply for jobs."

Lock said although the overall revenue for the company remained the same as last year, the average spending per customer had decreased by 8 percent this year.

In order to compensate customers for a possible price increase, Lock said the chain has been improving its service and food quality.

He said half the chain's customers were aged 25 or lower and considered a price increase to be unreasonable.

However, some youngsters said a price increase would not not stop them from going to karaoke bars.

"It is like bullying little children," said a 16-year-old surnamed Leung. "Happy hour [late afternoon] karaoke is already expensive."

A number of students said they prefer going to a karaoke bar during the cheapest hours with an average cost of HK$40 per person. They said even after the price increase they could still afford it.

One of the entertainment giants taking the lead in increasing its price was Ocean Park. Last month it raised its admission fees for adults by 10 percent to HK$208 while that for children went up 14 percent to HK$103.