Hong Kong could see more than 1,000 restaurants shutting down as the novel coronavirus pneumonia persists, according to an industry expert.
So far, more than 100 restaurants have either suspended operations or gone bankrupt. This can be reflected in the city’s latest unemployment rate having soared to 6.5 percent – the highest in three years
The worst-case scenario would be the catering sector’s jobless rate surging to a historic high of 7 percent, said Simon Wong Ka-wo, president of the Federation of Restaurants and Related Trades.
So far, more than 100 restaurants have either suspended operations or gone bankrupt. This can be reflected in the city’s latest unemployment rate having soared to 6.5 percent – the highest in three years.
Fears over eating out have grown after more than 10 family members were infected by the deadly virus after a meal in Kwun Tong on Jan 26, while a 48-year-old police officer contracted the disease after attending a farewell banquet for a colleague on Feb 18. About 60 people who attended the banquet have been quarantined.
Wong said the mass infections have spooked diners and dampened the catering business, with the turnover for the industry having sunk 30 percent turnover to date. Some restaurants have seen their business plunging by more than 90 percent.
On the bright side, Wong believes that catering brands would not close down if they had a choice. The situation, he said, wouldn’t be too bad as long as industry players continue to support them.
He urged the government to support the catering sector for three to six months. Although the government plans to use its HK$30 billion special funding to prop up the key industries affected, it’s still not clear how soon the funds could be obtained, pending approval by legislators. If it takes longer than expected, small and medium-sized enterprises could fail if their cash flow dries up.
Wong warned that next month would be crucial to the battered industry as it would all depend on whether the epidemic could be contained and brought under control.
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