Reality bites as restaurants shutter, workers owed pay

Top News | Sophie Hui 26 Aug 2019

Some 700 restaurant workers have been left with HK$10 million in unpaid severance payments after 15 Chinese restaurants closed down amid the unrest, a catering unionist says.

Kwok Wang-hing, chairman of the Eating Establishment Employees General Union, said it has received requests for help from the workers since June after the 15 restaurants shut down due to capital flow problems.

Kwok said the owners stressed that the unrest had dealt a heavy blow, with their business directly affected by the tourism downturn. "There are 18,000 restaurants [in Hong Kong] and they have to rely on all types of people like tourists to achieve their turnover," he said.

Kwok said turnover of restaurants in a popular area has plunged to less than HK$3 million a month from HK$6 million.

Many had to cut staff such as waiters as there are fewer banquets, while others had stopped hiring casual workers, he said.

Yeung Wai-sing, chairman of the Association for Hong Kong Catering Services Management, said business in restaurants has fallen 20 to 30 percent in August compared to the same month last year.

During the Kwun Tong protests on Saturday, he said more than 40 restaurants near MegaBox in Kowloon Bay had to shut their doors.

"People are more cautious. Almost no new restaurant has opened in these two to three months, except one or two Hong Kong-style tea houses in residential areas," Yeung said.

He said people will not especially open a restaurant in popular areas as they face a bigger risk of their business being hit by the protests.

There are about 2,000 Chinese restaurants in Hong Kong and are now offering promotions and discounts.

The increased operating costs are also due to the price rise of pork. But restaurants, Yeung said, do not dare raise prices.

He said a significant drop in mainland visitors has affected restaurants' business, while many bookings and banquets had been canceled due to weekends of demonstrations and clashes.

Meanwhile, Financial Secretary Paul Chan Mo-po said the "economic typhoon" is gradually forming.

Chan wrote on his blog yesterday that some industries at "windy locations" - such as tourism, catering and retail industries - have already felt the pain.

Visitor arrivals in August so far have dropped to nearly 50 percent. Some hotels and Chinese restaurants have required their staff to take no pay leave.

Sales in retail and catering sectors have also seen a double-digit fall. Chan said he is worried that if the situation continues, employers will have to lay off workers.

Secretary for Financial Services and the Treasury James Henry Lau said on his blog that many banks or large investment banks believe Hong Kong is on the brink of a recession.

He hopes the community can put aside preconceptions and opposition to cope with the declining economy together.

Lau said the political team is willing to have dialogue in communities. The government also values industries' views and meetings with the finance industry will be arranged.

sophie.hui@singtaonewscorp.com

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