Two discussion panels at the recent ULI Hong Kong conference, held at the Murray Hotel on September 9, looked at the resilience of the city’s hotels and F&B industries and how both were adapting to deal with recent travails.

The pandemic has led to some curious circumstances in Hong Kong, the F&B panel, moderated by Maria Ariizumi, head of development at Swire Hotels, declared. One of these has been a boom in the popularity of Japanese restaurants, already a mainstay of the Hong Kong dining scene. Martin Lee, chief operating officer of Chinese & Western restaurants at Hong Kong’ Maxim’s Group, said Japanese restaurants had been the best performing in the Maxim’s portfolio, while a number of new smaller Japanese restaurants had popped up all over town.

Jonathan Zeman, chief executive of Lan Kwai Fong Group, agreed, saying: “We run three Japanese restaurants ourselves and they have all roared back to life, which is really great.”  Both panellists agreed that the growth in popularity was due to the COVID restrictions on travel. “I think Tokyo’s one of the top tourist destinations for Hong Kong people, and when you can’t travel, you look for that experience at home,” said Zeman, adding that the desire for experience was also boosting the popularity of smaller, more intimate restaurants.

As well as new restaurants, Hong Kong has seen an upsurge of new independent coffee shops, suggesting a need for social spaces in the currently isolated city.

Syed Assim Hussain, co-founder of Black Sheep Restaurants acknowledge that times had been tough but said merely surviving had given his business the confidence to expand and even take on larger projects. “I think just by the virtue of surviving, we have some opportunities available to us that are truly world-class. These are opportunities for us to change our destiny as a small restaurant team. We feel maybe this is the time to take a few risks, to view larger sites.”

The pandemic has also changed the relationship between landlords and F&B tenants for the better, the panel agreed. “Landlord bashing is a favourite tenant sport in Hong Kong,” said Hussain. “However, we work with large and small landlords, and I can tell you that the support across the board has been quite positive. Although I should also say that we have done good work for our landlord partners.”

Lee agreed, saying: “A lot of developers have been very helpful and helped us to survive because of the relief they gave us.” He added that there was more of a partnership between landlords and tenants and that landlords were particularly supportive of innovative concepts.”

Overall, the mood in the city’s F&B businesses is very positive, with a strong comeback for dining out since spring. Hongkongers are clearly not content to stay home and order delivery.  Hussain said: “Even if Hong Kong remains in a tight lockdown for another year, I feel we will be okay.”

The mood in the hotels panel was somewhat gloomier, with the focus on surviving rather than thriving. The panel featured representatives from several leading hotel groups. Panellists were highly critical of the restrictions on travel, which have been some of the strongest in the world. Hong Kong’s hotel groups have also been setting the city an example for vaccination, with the vast majority of staff fully vaccinated, panellists said.

While restaurants in hotels have been busy, hotels require rooms and banqueting halls to be occupied if they are to turn a profit. At present, with dining and staycations, Hong Kong hotels are surviving, but only breaking even. However, the consensus is that business will bounce back dramatically once the border is open again.

The positive for the hotel industry is that the pandemic has driven innovation. Technology is at the heart of this; for example, more hotels are using automation to reduce staffing levels, as lean operations are crucial. Technology can also help build a streamlined loyalty scheme and manage customer information, which means more people booking directly through hotels. One hotelier said that more than two-thirds of 2021’s capital expenditure had been on technology.

Thankfully Hong Kong is still a great place to do business and is a gateway to China.  Though strict regulations and ongoing uncertainties means the hotel industry still has a few harsh realities to face. Staycations, though popular, are not sustainable. Looking to the future, the possibility remains that large banqueting events may not return in the same way, which means that space might have to be adapted. An understanding of the evolving needs of customers, more demand for outside space and focus on efficiency and sustainability, more use of technology to ensure even more resiliency.