How Can the F&B Industry Survive COVID-19 and Build Resilience in Hong Kong

Photo: bighospitality

Introduction

It has been a year and a half since the COVID-19 virus started sweeping the globe, and it has thrown Hong Kong’s food and beverage industry into chaos. A recent report shows more than 2,300 restaurants and cafes have closed down since the beginning of the pandemic and the numbers are still growing.

Current Situation

With the COVID-19 still spreading through the community, all restaurants and cafes are required to comply with the local government’s disease control regulations, for instance, businesses can only operate at 50% capacity, limited operating hours etc.

Even with the easing of some of the restrictions in recent weeks, Hong Kong’s low vaccination rate means the situation is likely to remain unstable for the foreseeable future. With all the regulations and social distancing measures in place, some restaurants and cafes have had to transform their business model from offering dine-in primarily or exclusively, to offering takeaway services only. Many businesses are still struggling to survive even if they have partnered with food delivery apps to increase their sales. The goal of our research is to explore how COVID-19 has affected these businesses and changed the way customers behave.

Covid-19 regulation limits the dine-in capacity to 50% (Photo: SCMP)

Research

To get a clearer picture of what has changed in the F&B industry during the pandemic, we have conducted surveys and interviews on both the F&B business and customer side. The results are quite intriguing. Not only did we discover some dramatic changes in the way restaurants operate and have had to adapt to fulfil the new regulatory requirements, but there seems to have been some fundamental changes to customer dining habits and behaviours as well.

According to the results of our survey, we can conclude that most of the restaurants have found it hard to operate due to the short notice given on safety measures and the ever-changing policies imposed by the government. The change of business hours, limited dine-in capacity and number of persons per table being good examples. All these changes seem to have had a profound impact on the F&B industry.

Additionally, we asked the surveyees to choose 3 main expenses of maintaining a business, and we found that:

  • 91.7% of the surveyees state that the main expense of maintaining their business is rent. Manpower coming in second with 83.3% surveyees choosing it

We can say that the customer’s behaviour has clearly changed because:

  • 83% of surveyees would eat out at least 3 times a week before the pandemic, and this number dropped by nearly half to 42.6% during the pandemic
  • 12.7% of surveyees would order food delivery before the pandemic and this number more than tripled to 44.7% during the pandemic

We identified 3 main ‘pain points’ from each side:

From the business owner‘s view:

Pain point 1:

The rent in Hong Kong is extremely high and most landlords refused to lower the rent even under the pandemic situation. #RENT#

Pain point 2:

Under the latest regulation, only restaurants with vaccinated or regularly tested staff are allowed to return to something like business as usual. While it is always hard for businesses to hire or retain their staff, this policy makes the labour problem they’re facing worse. #LABOUR#

Pain point 3:

Businesses want to increase sales but are limited in their options due to the limited capacity and business hours. What’s more, shop spaces are generally very small in Hong Kong anyway, and so many restaurants that always struggled with customer capacity are finding the COVID era restrictions particularly burdensome. #LIMITED CAPACITY#

Staff at The Old Man hold signs protesting (Photo: The Old Man)

From the customer’s view:

Pain point 1:

87 % of customers surveyed said they felt frustrated when there’s a long queue waiting to be seated or for food. 60% of people surveyed would usually just leave due to the long line. #WAITING TIMES#

Pain point 2:

All customers are required to use the LeaveHomeSafeApp or share their personal information to enter the premises. 79% of people surveyed find it annoying and hold negative thoughts towards this policy. #DATA PRIVACY#

Customer scanning the QR code of personal data form (Photo: Look Local Magazine)

Pain point 3:

The “vaccine bubble” requires all customers to be vaccinated to enter restaurants, bars and cafes after 10 pm. This policy created a big problem for unvaccinated customers wanting to go out for late night dining with their friends as they can’t enjoy each other’s company in the places they want to go. #VACCINE BUBBLE#

The Problem

The result of the analysis and research indicates that F&B owners and consumers hold different opinions and perspectives. As we are living in an unprecedented time and government authorities around the world were initially not equipped to face such a challenge, it is understandable for them to operate on a trial-and-error basis towards different safety measures and regulations. However, we can see such an approach imposed by the authorities is having a massive impact on both the F&B businesses and their customers.

So how might we help the business owners and customers? What can be done to help them adapt to the ever-changing safety measures so that businesses can survive and people can enjoy a great meal without having any worries about getting sick or breaking the law?

There is no perfect solution to satisfy every party, but after conducting research and deep-diving into this topic, there is one potential way to improve and alleviate the current pain points, namely, the idea of a Cloud Kitchen.

Visualisation of the cloud kitchen (Photo: Dhaka Courier)

It is a relatively new concept, which is a delivery-only kitchen without physical dine-in spaces. Cloud kitchens allow restaurants to rent the kitchen space at a lower price and it requires less staff to operate, which in turn allows them to minimise costs.

Moreover, the pandemic has shifted how employees and households operate; many companies are allowing their employees to work from home post-pandemic. Adjusting to this change, the trend of food delivery will continue to grow and cloud kitchens are a great way to scale these kinds of businesses with less risk and overheads (such as high rents and utility bills).

Conclusion

Whilst there is common ground for both the F&B businesses and customers, they have both suffered from the ever-changing regulations on the F&B industry, it is clear that businesses have had to bear most of the burden. It is a sobering thought therefore that it is still far from clear when the pandemic will end and if things will ever go back to the way they were before.

Customers have adapted and so too must restaurants if they want to stay viable. The goal of our research was not to solve all these problems, but to help generate solutions that could make the lives of customers and restaurant owners easier going forward. We look forward to exploring this issue further and coming up with the most suitable and effective solutions that meet both the needs of consumers and businesses.

DISCLAIMER

This case study is conducted by Michid Boldbaatarand Sandee Hui as a UX design student research project. The views expressed here are solely our opinions and don’t reflect the opinions of our school the Xccelerate.

--

--

--

UX/UI Practitioner | Currently based in UK

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

Tilorma residents exposed to river blindness as black flies invade village

#SyriaHoax, Part Two: Kremlin Targets White Helmets

REGARDING AFGHANISTAN

Confession: I Have No Safety Net

𝐓𝐈𝐏𝐒 𝐓𝐎 𝐈𝐍𝐂𝐑𝐄𝐀𝐒𝐄 𝐅𝐀𝐂𝐄𝐁𝐎𝐎𝐊 𝐄𝐍𝐆𝐀𝐆𝐄𝐌𝐄𝐍𝐓

Why understanding the Belt and Road Initiative is absolutely crucial

The National Identity IV: India’s Original “Cold Start”

Top tweets about Brazilian justice minister’s resignation suggest Bolsonaro losing support on…

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Sandee Hui

Sandee Hui

UX/UI Practitioner | Currently based in UK

More from Medium

Motivational UX how far can we go?

The best mobile engagement practices — a specialists perspective

What’s holding you back from acquiring a dream UX designers team?

UX designers digital experience

THE UX OF YELLOW | UX STUDIO PRACTICES