Coronavirus: Restaurant Association of Singapore seeks rental rebate to offset drop in business

President of the Restaurant Association of Singapore Vincent Tan speaks at a press conference at the Singapore Manufacturing Federation on Feb 13, 2020.
President of the Restaurant Association of Singapore Vincent Tan speaks at a press conference at the Singapore Manufacturing Federation on Feb 13, 2020.PHOTO: SHIN MIN DAILY NEWS

SINGAPORE - The Restaurant Association of Singapore (RAS) has asked shopping mall landlords for a rental rebate to help the food and beverage industry, which has seen a sharp drop in business since the coronavirus outbreak started here late last month.

It also conveyed its gratitude to Jewel Changi Airport, which has offered its tenants a 50 per cent rental rebate for February and March.

At a press conference on Thursday (Feb 13), its president, Mr Vincent Tan, said the association had sent out letters on Feb 10 to 24 shopping mall landlords, which include Capitaland, Frasers and Mapletree, to review rentals. It is looking at an initial cut of 50 per cent from February to April.

It had conducted a snap poll of its members and more than half the respondents indicated that they expect a loss in revenue of more than 50 per cent over the next three months.

Close to 60 per cent said they were "not prepared or equipped" to deal with the unexpected situation.

The association has more than 450 members, which operate close to 4,000 outlets.

It said some of the malls have responded to say that they would increase marketing efforts, such as free parking, to drive customer traffic. They also said they were trying to understand the situation and would talk to tenants individually. But none has committed to a rental rebate.

Jewel Changi Airport had offered its rebate before the letter was sent out.

Mr Tan pointed out that rental and manpower comprise more than half the operation cost for most restaurants. Many of them have already cut part-time workers and the industry is trying to avoid retrenchments and closures.

RAS has also approached the Singapore Government for help. In a Feb 8 letter addressed to Minister for Trade and Industry Chan Chun Sing, the association asked for a suspension of the foreign worker levy; wage support in the form of covering half the employers' Central Provident Fund contribution; higher access to working capital loans; and rental subsidies in government-owned properties, such as from the Housing Board, JTC Corporation and National Parks Board.

 
 
 

On efforts to offset the drop in dine-in customers, RAS said the increase in home delivery orders is too small and is restricted by the number of delivery staff. Restaurants also have to pay 30 per cent of the value of each order to the delivery companies.

And with few people going to the malls, any discounts or promotions offered by individual restaurants will just cannibalise business from the others.

Mr Andrew Tjioe, who is RAS' president adviser, said: "We want to avoid sending our staff on unpaid leave as many of them live hand-to-mouth.

"Many of our members are small players and it will take them years to recover from this. That's why closures are possible if we do not do anything."