HK's Fine Dining Restaurants are Changing How They Operate

There can be no denying that COVID-19 has had a profound effect on the F&B industry. In Hong Kong, alone, restaurant businesses have reported sales drops of over 50% when the virus was at its peak. However, in order to keep on surviving, many of the city's solely table-service restaurants have turned to delivery as a means of bypassing customers' current propensity to stay at home and self-isolate. However, until now, we haven't really seen the delivery bug bite the city's more exclusive eateries. 

That has changed, as of late, as several of Hong Kong's top restaurants are now also making the jump to offer delivery to customers. "From ornate Cantonese dining halls to brasseries serving fine French cuisine, several of the city's Michelin-starred restaurants are designing menus so diners fearful of venturing out during a surge of new coronavirus cases can still enjoy their favourites at home."

Why are Michelin Star Restaurants Shifting to Delivery?

There are a few key reasons as to why fine dining restaurants are now taking the plunge and offering delivery. First the general public "are staying home because of concerns over the health crisis." Undoubtedly, this is one of the main issues fine dining restaurants face because a large part of what they offer is the experience and ambiance of their venues. Without customers coming to eat at fine dining establishments, survivability in a market like Hong Kong becomes tough. 

Second, bookings have plummeted since the COVID-19 pandemic broke out. For example, "dinner bookings have declined by 30 per cent at Ying Jee Club since the outbreak." Without securing bookings, turnover will be reduced and that, in turn, makes it tougher to keep up with overheads like staff costs, ingredient costs and rent. 

Finally, unlike other foreign markets, Hong Kong's F&B industry was already facing hardships as early as the 4th quarter of 2019. If we look at the figures, we can see that "in the fourth quarter alone, restaurant sales fell by nearly 15 per cent to HK$26 billion (US$3.4 billion), from HK$30.4 billion a year earlier. It was even worse at the city's Chinese eateries, where sales fell by 19 per cent to HK$13.4 billion in the quarter."

JIA Group

One of the fine dining groups in Hong Kong that has made the shift to delivery in response to COVID-19 is JIA Group, who "operate 15 bars and restaurants in the city." They have shifted their menus to have a larger focus on "catering, delivery and home cooking experiences with its chefs through the company's JIA Everywhere service, which debuted in March." This new experience includes delivery for the first time in JIA Group's Michelin-starred restaurants, Duddell's and Louise. 

When talking about why JIA Group decided to make these new changes, "Yenn Wong, the chief executive of JIA Group, said the current environment is the "most challenging" time the restaurant group has experienced since it was founded a decade ago." She also added that "sales have declined by 60 per cent, with foot traffic at Duddell's "significantly reduced" and most events in the city postponed or cancelled." For these reasons, it was important for JIA Group's restaurants to shift their business model to include delivery so that they could continue to provide great food to customers even if they could not directly come to JIA Group's restaurants. 

Black Sheep Restaurants

Another of Hong Kong's high end restaurant groups to embrace a delivery model is Black Sheep Restaurants. They chose to make the leap to delivery because they felt that "the [current] environment is the "greatest challenge" the Restaurant industry has faced in modern history." They believe that Hong Kong's restaurant numbers could "shrink from about 15,000 last summer to less than 10,000 this year." 

To make sure that their restaurants are not part of that statistic, Black Sheep decided to include delivery as a way to keep business alive during COVID-19. In order "to navigate the difficult environment, Michelin-starred Belon and New Punjab Club, which are among the 22 restaurants operated by Black Sheep in the city, have debuted takeaway menus for the first time."

In order to push further toward an online business model, "Black Sheep began offering delivery from some of its restaurants through its own app last year, but has expanded the offerings to most of its locations recently." They have also begun leaning into different tactics that can take advantage of their online presence such as promoting "a new steak sandwich lunch from its La Vache! Parisian-style steakhouse to a "virtual happy hour" package from its Baja-inspired Taqueria Super Macho." 

Delivery is the Future for Hong Kong

The restaurant industry in Hong Kong is likely to change permanently even after the virus subsides and life returns to normal. With more and more restaurants investing in delivery, the rise of online restaurant storefronts will continue into the foreseeable future. It is predicted that Hong Kong's delivery industry will "show an annual growth rate (CAGR 2020-2024) of 5.9%, resulting in a market volume of US$936m by 2024." There's never been a better time to look into delivery as a viable second stream of revenue for your F&B business. Many POS systems even come with delivery settings baked right in to ensure optimum ease and simplicity when running the restaurant and delivery sides of your business, simultaneously.