Does it feel like déjà vu? Groundhog Day? Surely 2022 is not really going to be 2020, part 2? What should we expect? It can’t hurt to look at the data provided by the various governmental departments over the past few years to get a feel for what’s the same and what’s different.
Early last year, I downloaded two snapshots of restaurant registration data, for the last day of both 2019 and 2020, and was surprised to learn that the number of restaurant licences in Hong Kong actually increased. We looked at the breakdown by region, licence type and other factors such as rent.
RELATED: 2020 restaurant data overview
The 2020 TLDR;
Every district except Yau Tsim and Wanchai saw an increase in restaurant licences in 2020. The total number of restaurant licences increased by 415. Sai Kung had the largest increase of licensed restaurants, with an overall increase of 69 new licences, Central and Western District saw an increase of 23 licences, while Wanchai restaurant licences reduced by 44.
Similarly, the number of liquor licences increased by 105 in 2020, but again both Yau Tsim and Wanchai suffered negative growth.
2021 restaurant data*
The total number of restaurant licenses registered with the Food and Environmental Hygiene Department, Hong Kong. Data from data.gov.hk.
*restaurants with no registered name are excluded from the data, by my choice
Overall, Hong Kong gained 94 restaurant licences in 2021, which is less than the 415 from 2020. Investigating the district breakdown, the picture is quite different from the previous year.
Differences in licences by district, 2020 & 2021
In 2020, Sai Kung was the most popular district for new restaurants, adding 69 to its total, and it continued to be the most popular in 2021, with another 33. This is all the more impressive when you consider that Sai Kung only totalled 473 restaurant licences at the end of 2019, so the increase is from a much smaller base. Central and Western, for example, had 1,612 restaurant licences at the end of 2019, so an increase of 23 is less impressive.
Wanchai was one of only two districts with negative growth in 2020. The number of Wanchai restaurants decreased by 44, but it managed to add 32 (2%) back again in 2021.
However, Yuen Long restaurants reduced by 18 (1.9%) in 2021, contrasting with an increase of 51 (5.6%) in 2020. Not all country living is working out!
Types of licences
You might recall there are different types of licences:
- RL: General Restaurant
- RR: Light Refreshment Restaurant
- MR: Marine Restaurant (excluded from our data as they only number five each year)
What’s the difference between the restaurant categories? According to the Food and Environmental Hygiene Department (FEHD) guide, a holder of a General Restaurant (RL) licence is allowed to prepare and sell any kind of food for consumption on the premises. A licensee holding a Light Refreshment Restaurant (RR) licence is restricted to groups of weirdly specific items, available in Appendix B of the above link.
The changes this year are all in the RL category. There has been no movement in snack licences, but general licences increased by 0.8% in 2021, compared to 2.6% the year before. Nothing very interesting here.
Did we booze more? Sure feels like it
It seems there was additional demand for liquor-serving establishments, as evidenced by the list of Hong Kong liquor licences granted by the Liquor Licensing Board. Find the list of liquor licences here.
Every district in Hong Kong ended 2021 with more options to buy alcohol – except Kwai Tsing, with a modest loss of three liquor licences.
In Hong Kong, there were 8,926 liquor licences at the end of 2021, an increase of 207 over the year, adding to the 105 additional licences in 2020. Unlike general restaurant licences, the increase in liquor licences was significantly higher (+2.37%) last year as compared to the previous year (+1.22%).
What about rent?
We wouldn’t be Hong Kongers if we didn’t talk about rent! This private retail rent data is from the Rating and Valuation Department and demonstrates the probable reason why we had so many new restaurant licences in 2020.
There was a significant drop in private retail rents midway through 2019, which likely boosted restaurant licences, but rents have gradually recovered a little over 2020 and 2021. It does look as though Hong Kong Island rents dropped again in the final quarter of 2021, and this can be confirmed once the data for December 2021 is released.
Without another rental drop like we saw in 2019, it’s unlikely that we will see new restaurants at the rate of 2020, unless the receipts are particularly good.
Show me the money
Do a cursory search for HK restaurant-receipt data and you will find headlines like this:
- Total restaurant receipts down 5.9% to $112.5b in 2019 – hongkongbusiness.hk, early 2020
- Record slump in Hong Kong restaurant sales – insideretail.asia, 7 May 2020
- Hong Kong restaurant earnings dive nearly 30 per cent in 2020 as pandemic batters business – SCMP, 4 February 2021
Surely this F&B caper is for mugs. So what about 2021 receipts? The Census and Statistics Department provides a convenient table summary of total restaurant receipts. No coding required! We downloaded the quarterly dollar-value receipts for 2018–2021.
The headline for this could read “Hong Kong restaurant earnings up 29% in last quarter of 2021”, but that feels unnecessarily cruel given that we are likely back to 2020 territory right now. Unlike 2020, Hong Kong F&B outlets are well prepared with takeaway and home delivery options, but even so, the current restrictions are a death by a thousand cuts for no specific goal. Our present misty path is akin to one trying to eat less to lose weight instead of committing to a meal and exercise plan to lose 5kg.
Whilst we hope a coherent plan for the future is on its way, please do consider visiting your favourite restaurant for either a cosy long lunch or some takeaway. They are hurting.
RELATED: Takeaway and delivery deals right now
Comments or suggestions? Email me. Bonus: here is the code to import XML data into Tableau
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