Release dine-in hours in HK did not turn out. No dining inside restaurant continue for 7 more days. What can struggling restaurants do now?
Rumors to release dine-in hours in restaurants has spreaded around recently. But it did not come true as expected. Restriction of no dining inside restaurant continues for 7 more days until late August. Can struggling restaurants in HK stay afloat for longer?
Currently, no customers can dine inside restaurant between 6pm and 5am. However, food delivery and takeout are still allowed.
After the third outbreak of Covid-19, the Government has imposed a series of regulations. Restaurants can serve dine-in customers until 6pm. Further restriction has been imposed afterwards. For example, two persons can be served in one table only.
Apparently, the regulation can help to reduce the infections inside eateries. Nevertheless, it has induced substantial financial loss to restaurants. Since dinner revenue constitutes more than half of their income.
But can release of dine-in hours help the struggling restaurants in Hong Kong?
Can release dine-in hours help?
Yes, it can definitely help!
HK restaurants have been in double whammy hardly hit by social protests and Covid-19 outbreak, which has lasted for more than one year. Inevitably, its disruption on restaurant business has never been seen before.
Although the Government has launched some subsidies to companies, it can help to stop the bleeding for a while but not for long. Actually, inadequate cash flow has already caused the collapse of many restaurants.
In particular, there are no signs that current virus re-surge will be gone soon. Then the release of dine-in hours will be remote.
Frustrated though. What else the restaurant owners can do now?
Talk to your Landlord again
No wonder that landlords have got requests of assistance from their tenants since the protests, then the Coronavirus outbreak.
Meanwhile, some restaurants cannot pay full of their rental liabilities, whereas their landlords are facing higher risk of reletting.
Undoubtedly, the situation is getting worse. That means the tenant might be subject to legal proceeding, while the landlord has to take extra costs for reletting.
What should both parties do now? Talk to your landlords or tenants earlier should be the best way out!
How to start the negotiation?
Inevitably, it will fall to the tenant to start negotiation, since it’s the tenant who would like to change the lease. But how and what to start with?
Let’s see if these proposals to your landlords can work:
- delay payment but pay interest of late payment for a period of time
- reduce rental payment for a period of time
- reduce basic rent with longer lease duration
- waive basic rent but pay higher turnover rent
- restructure the lease with agreeable lease terms
What is the best tactics? It depends on your current business situation. Among all, lease restructure would make sense to the landlord who prefers to keep the tenant for longer duration.
In fact, doing nothing is the worst. The sooner the better solution to both parties!