Header photo credit: Johen Redman on Unsplash
Combining my love of food and data, I went on a mission to try to objectively determine the level of devastation that I thought must have occurred in the F&B world in Hong Kong last year. I do love a chart...
Visiting the Hong Kong Government Data website, it is possible to download a snapshot of restaurant registration data for a period of time. I selected data from 31 December 2019 and from 31 December 2020, with the expectation of a reduction in restaurant registrations over the year. This was not the case.
Restaurant licences in Hong Kong, 2019–20
Every district except Yau Tsim and Wanchai saw an increase in restaurant licences in 2020.
The total number of restaurant licences increased by 415 over 2020. Sai Kung had the largest increase of licenced restaurants, with an overall increase of 69 new restaurant licences, Central and Western District saw an increase of 23 licences and Wanchai restaurant licences reduced by 44.
Perhaps there was a change in the type of restaurant licences issued. The licence categories are:
- MR: Marine Restaurant (of which there were 5 in 2019 and also 5 in 2020, so I excluded this)
- RL: General Restaurant
- RR: Light Refreshment Restaurant
In Kowloon City, Central and Western and a few other districts (not shown), General Restaurant (RL) Licence growth was negative whilst, at the same time, Light Refreshment Restaurant (RR) Licence growth was positive, but apart from that, overall we can see the “light” RR category increased only slightly more than the RL category – generally there is not a big difference between them.
We also downloaded a list of the licensed liquor premises in Hong Kong, which is supplied by the Liquor Licensing Board. In a year when bars are currently serving “substantial” food in order to be legally allowed to remain open, we actually saw an overall increase in liquor licences.
Liquor licences in Hong Kong, 2019–20
The number of liquor licences in 2020 increased by 105 overall, but again both Yau Tsim and Wanchai suffered negative growth.
Why are we seeing so many more restaurant and liquor licences in such a terrible year for F&B?
One possibility is that it takes time for the registration data to catch up. For example, on 2 March 2020 (which seems like 100 years ago now), Jumbo Floating Restaurant shut its doors. This early 2020 casualty and high-profile closure is not yet reflected in the restaurant licence data – on manual inspection, their licence expires at the end of June 2021. It might be that we need to wait until next year’s data to see the true picture.
But there are a significant number of brand-new openings too, which the data-lag theory does not account for. Is it possible that rents have reduced so much that Hong Kong’s restaurateurs see opportunities? This seems reasonable, so we got the data from the Rating and Valuation Department to find out.
Private retail average rents in Hong Kong, 2014–20
Retail rents in Hong Kong are decreasing
This graph certainly shows a significant reductions in rents, with a 33% decline from Q2 2019 to Q4 2020 for Hong Kong Island, so perhaps this is the main driver for the increased restaurant licences.
The licensing data we downloaded is quite messy. Between years, restaurant names are not necessarily the same, and there is missing data for expiry dates and restaurant types. Our data-cleaning gymnastics and manual inspection showed no clear patterns, except to say that some districts are faring far worse than others. As usual, time will tell.
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