,Bloomberg News: What’s your outlook for restaurants? Loh: Inevitably, restaurants are going to have to make some big changes. Anyone who assumes that things will go back to normal is probably in for a rude shock.
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IT’S hard to think of someone who would have their finger on the pulse of Singapore’s hospitality industry better than Loh Lik Peng.
Loh’s Unlisted Collection is behind some of the best known restaurants in Singapore as well as boutique hotels and dining establishments in major cities around the world like London and Shanghai. In Singapore, the group boasts Zen – which just earned its third Michelin star on Wednesday – and one-star Michelins Basque Kitchen by Aitor, Nouri and Burnt Ends.
He’s also chairman of the Singapore Cruise Centre and the Asian Civilisations Museum, among numerous other posts, giving him a vantage point on dining and tourism amid the coronavirus pandemic.
He spoke to Bloomberg News recently about these topics and more. Responses have been edited for length and clarity.
Bloomberg News: What’s your outlook for restaurants? Loh: Inevitably, restaurants are going to have to make some big changes. Anyone who assumes that things will go back to normal is probably in for a rude shock.
I am taking nothing for granted. We have plenty of contingency plans, in terms of what we need to do to pivot to takeout, in terms of lowering costs very quickly if the need arises. I can foresee even places with high vaccination rates possibly needing to go into lockdown for fairly extended periods for a number of years.
I’m encouraging all my restaurants to build a bigger cash buffer into all their business contingency plans. The typical restaurant would have 1½ to two months of cash flow in their accounts. My assumption now is that we need to keep minimum three months.
And making sure the staff are psychologically prepared. Everyone gets very tired by this stage. You tell them “oh, we’re going into lockdown again,” you can see everyone is just deflated.
One of the things we are looking at as a group, too, is to do a cloud kitchen. Those revenue streams in theory should be able to continue.
What about the outlook for tourism in Singapore?It’s going to be 2023 before we start seeing a normalisation.
The Chinese are not going to come back in big numbers – I don’t think the Chinese government is confident about letting their citizens out – and the Indonesians are certainly not coming back. If you see a recovery it may be from pockets of Europe, pockets of other East Asian economies like possibly South Korea or Japan.
I’m chairman of the Singapore Cruise Centre so we control all the ferry ports here. And so we studied that situation very closely. Given the infection rates and vaccination rates, we don’t really see 2022 being a year of recovery. So the broader tourism market in Singapore will remain highly challenged well into next year.