Hong Kong’s unemployment rate has risen to the highest level in 16 years, with the city’s tourist dependent food and beverage industry bearing the brunt of the economic pains from the pandemic.
Jobless rate in Hong Kong’s retail, accommodation, food and beverage sectors rose to 11.7% from July to September, the highest since 2003 SARS outbreak, according to the latest data released by Hong Kong government this week, raising fears that more layoffs and closures from restaurants and their suppliers will follow.
Although the government eased some dining restrictions at restaurants last month after nearly two months of dine-in ban during dinner services, restaurants are allowed to extend dine-in services until midnight, but are still only restricted to operate at 50% capacity, and only four people are allowed to sit per table.
In the height of the pandemic, Reeze Choi, sommelier and founder of Somm’s Philosophy, admitted some of the city’s sommeliers lost their their jobs.
For those who kept their jobs, he added the biggest impact from the pandemic is on their their income, “First, and most importantly, it is affecting their income. Some of them are forced to take a few days even half a month of unpaid leaves. Their educational trips are cancelled, and some important examinations and competitions are postponed.”
He observed these who suffered job loss are not yet a sizable number and things are starting to look up in October. “Some of the restaurants are facing shortfall of manpower again, because their business is back on track currently, so the sommeliers are easier to get a new job,” he says, injecting a sense of optimism.
Simon Wong Ka-wo, president of the Hong Kong Federation of Restaurants and Related Trades, previously said that the catering sector suffered an estimated revenue loss of HK$5 billion in July and HK$6.5 billion in August.
Smaller restaurants compared with dining groups and chains will more likely suffer from the pandemic. Food delivery app Deliveroo earlier conducted a poll and found more than 50% of 2,000 small restaurants on its platform in Hong Kong face the prospect of immediate business suspension.
The latest government data also showed in the third quarter, the city’s overall unemployment surged to 6.4%, highest quarterly rate since 2004, while the number of jobless people in the city increased by 11,500 during the period to 259,800.
The city’s Secretary for Labour and Welfare, Law Chi-kwong, however, breathed a sign of relief as labor market starts to show signs of stabilizing towards the end of third quarter.
Nonetheless, he cautioned with Covid-19 cases still raging globally and weak consumption momentum, the city’s jobless rate will remain high.
The government has rolled out HK$290 billion in relief measures under an anti-epidemic fund, as well as budget measures to help the city weather the crisis, including offering wage subsidies of up to HK$9,000 per month for employers to save jobs.
Industry leaders in food and beverage industry have called for rent subsidies from the government, but nothing has been materialized yet.