Tuesday, November 30, 2004 Posted: 1335 GMT (2135 HKT)
Hong Kong boasts more than 10,000 restaurants, while London, which is a bigger city, only has 7,000.
Getting a table for lunch at Zen, a downtown Hong Kong restaurant that prides itself on its "dim sum", can be difficult these days.
"We are having to turn people away," says Fred Ng, a director of Zen International Food and Beverages Ltd, which owns two restaurants in the territory.
"In the last two months business has really started to pick up as share prices have risen and the property market has started to go crazy. Next year should be a very good year."
Hong Kong''s economy has rebounded this year on the back of buoyant exports, a vibrant tourism sector and strong foreign investment, putting it on course for 7.5 percent growth over 2003, according to a government forecast.
Spending by locals, who have endured three recessions in the past six years and crashes in the stock and property markets, has been more cautious.
But signs that the restaurant business is back on its feet suggests that local consumers too are starting to believe that, this time round, economic recovery is more durable, observers say.
At Petrus, one of Hong Kong''s more up-market restaurants, 200 or so local customers are regulars again at the eatery''s opulent French dining room with views across Hong Kong harbour.
It''s nearly a decade though since anyone cracked open the house''s finest offering: a bottle of 1900 Chateau Petrus wine on sale for HK$150,000 (US$19,230). Tips moreover are down a third from 2000, the last time the economy was on an upswing, and from the boom in the run-up to the territory''s return to mainland China in 1997.
"In 2000 and 1997 people weren''t looking at the price. Now they are a lot more price conscious," said Frankie Yan, service manager of Petrus.
Sustainable recovery
Restaurateurs aren''t complaining though, if a more discerning consumer signals more responsible spending behaviour.
"In 1997 it was silly, it was obscene. People were spending money foolishly as if it was their last supper. I''m happy to say I prefer it the way it is now," said Allan Zeman, chairman of Lan Kwai Fong Holdings Ltd and developer of the Lan Kwai Fong entertainment district.
"People are optimistic that it''s a more sustainable economic recovery. Personally, I think it will go on for a few years. China is becoming a very important player in world business and Hong Kong will get the overflow," he said.
Revenues from Zeman''s 24 bars and restaurants in Lan Kwai Fong are still down about 12 percent from the same period in 2000 but are 26 percent higher than last year when the SARS outbreak in spring devastated the restaurant business.
"SARS was the lowest point I''ve experienced in my entire business career," said U.S.-born Zeman, who opened his first Hong Kong restaurant, California, 23 years ago. "At the height of SARS there were almost no customers at all and we would make a daily decision on whether to keep restaurants open."
Hong Kongers typically eat out a lot, often to escape cramped living spaces, and the territory boasts more than 10,000 restaurants. That compares with London, a much bigger city, which has fewer than 7,000 restaurants.
This year the industry has benefited from a growing expatriate population, as China''s economic expansion has encouraged investment in the territory, and from a tourism boom.
Record numbers of visitors from mainland China have flocked to the territory after Beijing relaxed travel restrictions. At Petrus, well-off mainlanders are happy to splash out HK$2,000 on a bottle of wine, says Yan.
Locals, however, are the mainstay of the restaurant business, says Yan, who is confident that improving consumer sentiment can boost revenues by 10-15 percent next year.
It''s a tough business though, even in good times. As revenues pick up, landlords have demanded higher rents from restaurants, which have limited room to raise prices.
Zeman says prices at his restaurants are already 10 percent higher than a year ago and business could quickly evaporate if they increase much more.
"There is price resistance," he said. "Today the consumer will dictate how much prices can go up. In the old days, people didn''t care."
