It is well known that Hong Kong is a food paradise given that there is a selection of kinds of food and a wide variety of dining establishments can be founded in Hong Kong. Business of restaurants plays an important function in the food service sector in Hong Kong and it is acquiring momentum due to the variety kinds of food offered. Nevertheless, due to the cost, labor and competitors aspects, Hong Kong dining establishments are dealing with obstacles both internally and externally, and as a consequence, they are opening and closing at a fast lane.
First and primary, one of the vital obstacles dealing with by Hong Kong restaurants is the skyrocketing rent of their areas. Due to the increasing stress of the land use in Hong Kong, the land rate is increasing and as a result, the lease is rising. The remarkable quantity of home leasing increased by the homeowner includes a big monetary concern on the dining establishments.
Considering that they can not acquire any earnings if they need to pay such a costly lease, for that reason, they will have no choice however to close down their dining establishments. The well-known Lei Yuen Congee Noodles (Chung, 2013) behind Sogo Department Store in Causeway bay is a case in point. It was forced to close since it was located in the core area in Causeway Bay and the rent was doubled. This case reveals that the overwhelming lease might result in an end of a dining establishment service.
Besides, the food cost is another difficulties to Hong Kong restaurants. Due to the inflation, the expense of components is increasing. Some products like vegetables, cooking oil, cheese and beef are costing higher, dining establishments require to pay more and the profit is lower (Ryan, 2011). Some dining establishments had actually attempted not to increase the rate od their meals and make less profit they might get in order not to frighten their patrons at first, nevertheless, with the constant increase of food expense, they were not be able to hinder the increase of their menu prices. Undoubtedly, the boost in the rate of menus resulted in a loss of clients.
Moreover, labor shortage is also a key challenge of Hong Kong restaurants. (Wong, 2011) Because of the long working hours and tough work, many people are not willing to work in a restaurant, except those are passionate about food and beverage. With fewer newcomers in this industry, there is a lack of skillful staff. Although there is an implementation of minimum wage law in order to prevent workers from depriving, many people will prefer exploring in other industries rather that working in restaurants, especially the Generation Y who born in the 1980s and 1990s. McDonald’s Restaurants (Hong Kong) Limited is a case in point (Wong, 2011). The Generation Y group of staff has become increasingly mobile after the imposition of minimum wage law. They would like to seek better opportunities in other areas instead of working for long hours in the food industry. Since there will be fewer passionate people in food and beverage among the youngsters, as a consequence, there may be a shortfall of restaurants workers after the retiring of the current talented staff. The service quality and operational efficiency may not be maintained with a shortage of labor. Therefore, restaurants are facing a tremendous difficulty in the aspect of labor use.
Last but not least, there is a fierce competition among restaurants. In today’s highly customer-oriented marketplace, maintain increasing levels of food hygiene and service quality is certainly important. Restaurants need to ensure that the basic service is good and the menu should not be dull and it should include some special dishes regularly in order to attract customers. However, it is not the only requirement for maintain restaurants’ competitive edge. Becoming a successful restaurant, not only do the food and service are in a good quality, media attention is also needed. Most of the upscale restaurants in Hong Kong are aggressive in holding events or collaborating with other business partners to offer promotions and to attract media attention. They will also add leisure components to the dining experience, such as wine tasting sessions, cooking classes or food photography courses(HKQAA,2011). Many casual restaurants also take advantage of the social media platforms, for instance, OpenRice and Facebook, to promote themselves by offering discounts. It shows that the competition among restaurants is extremely fierce and media attention plays a key role in the competition of restaurants. If the restaurants cannot stand out to catch customers’ attention through media, the business may not be successful when they are comparing with other restaurants.
To conclude, restaurants are facing many challenges in Hong Kong, ranging from internal challenges to external challenges. Although the monetary challenges, lack of labor and the fierce competition add a burden on running the restaurants business, there are always solutions to solve the problems. With the perfect service and tasty food provided, restaurants can succeed and always stand out from others.