FORGET limited-edition sports cars, Centurion credit cards and sky-high condominiums with a private car lift. Judging by the rate of new restaurant openings per day in Singapore, it seems like the new Singapore Dream is to have a slick restaurant-bar to call one's own, so you can knock back cocktails with friends as you watch the crowds - and cash - roll in.
Earlier this month, Deputy Prime Minister Tharman Shanmugaratnam spotlighted Singapore's potential to tap on regional demand to become one of Asia's top culinary capitals and a "distinctive destination" for dining.
After all, who in Singapore doesn't think and talk about food, oh, just about 24 hours a day? His call, it seems, is already being heeded. Recent statistics from the Accounting and Corporate Regulatory Authority show that 686 restaurants were opened last year. The nett increase of 149 restaurants was double that of 2011.
Yet, beyond the pomp of glitzy restaurant openings or the prestige of namecards that bear the title "restaurateur", a harsher reality looms.
There are the less beckoning statistics that few pay attention to, such as the 537 restaurants that closed last year. Or the countless other unsuccessful eateries sold off from one failed restaurant owner to a still-optimistic successor. Or the telling flyers by now permanently tacked outside most F&B establishments, pleading for fresh hires.
At last count, at least 10 prominent restaurants have shut or will be shutting between June and December this year, with many more quietly folding up under the radar.
Playing on rougher terrain
Chefs and restaurant owners BT Weekend spoke to cite rental hikes and difficulty in hiring service staff as the chief reasons for restaurants to wind up. From July, the maximum proportion of foreigners permitted in a service firm has been capped at 40 per cent, down from 45 per cent before. Profiteering landlords, too, have been relentlessly upping rents, safe in the knowledge that beyond every exiting tenant lies several more deep-pocketed new entrepreneurs waiting with ready cheques at the door.
Other causes for failure include poorly thought-out food concepts and shareholder disputes, while a further handful close due to circumstances beyond their control, such as a termination of their leases by the government or by private landlords.
One recent casualty of a rental surge is modern fine-dining restaurant Keystone, which closed in Stanley Street last month. Though the restaurant was packing in close to a full house during weekday lunches, the rent increase - a figure head chef Immanuel Tee declined to reveal - made it unsustainable to continue operating a fine-dining restaurant, for which margins are already slim, he says.
Instead of pencilling in an 85 per cent rent increase, Sicilian restaurant Gattopardo will uproot from Hotel Fort Canning to Tras Street next January. The new space is only half its existing premises, but head chef Lino Sauro says the smaller space helps to ease the prickly problem of finding labour too.
"Our restaurant is usually about 70 per cent full on average, but we still have to staff it as though it is 100 per cent filled," says chef Sauro. "I would rather have a small place that is always fully booked than a big place that is hard to fill."
Echoing his sentiment is Vitelio Reyes, the Venezuelan head chef of South American restaurant, Sur. The 100-seater pulled in a stream of about 80 daily diners on weekdays and 200 on weekends, so its abrupt closure late last month surprised regulars. Sur was founded last December on a capital investment of $500,000 from a group of South American investors, but about $250,000 was later allegedly misused by one of the restaurant's shareholders, which sapped the restaurant's operating budget and led to its eventual demise.
Unscarred, however, Mr Reyes, who is now working with another restaurant group, hopes to re-open a similar South American restaurant-bar next year. "This time I will start small and slowly grow bigger."
Addressing the challenges
Mr Reyes hopes to see more schools for sommeliers and servers being established here to encourage more locals to view these roles as a viable career, the same way prestigious culinary schools such as Le Cordon Bleu or the Culinary Institute of America have helped to make cheffing a highly regarded profession globally.
Other restaurant operators have shifted their energies towards emerging markets in neighbouring South-east Asia, where labour is abundant and food, rental and operating costs are significantly lower.
Besides looking for a new Singapore home for his flagship restaurant when it closes on Mount Emily on Dec 1, the Wild Rocket Group's Willin Low is currently scouting for opportunities in the Philippines, Indonesia, Malaysia and London, where the former lawyer was educated.
The Les Amis Group will be veering away from fine dining - it shut Annam in August and will wind up Au Jardin next April - to concentrate on new restaurants in Vietnam and Myanmar. The Deliciae Group, meanwhile, plans to expand its mid-market brands such as Spanish tapas bar Sabio, L'Entrecote steakhouse and burger joint &Made, in South-east Asia next year.
Supply and demand
As for rent hikes, the Deliciae Group's strategy is typically to secure long-term rents for its premises. The only exception in their stable was cocktail bar, The Vintage Room, which closed for good last week when its two-year lease could not be renewed. The unit's landlord wanted to set up a bar of his own in the space, according to The Deliciae Group's CEO, Olivier Bendel: "A lot of people now think that because they like food and wine, and they know how to cook a little, they can open their own place," he observes.
Despite the seemingly low barriers to entry into the F&B industry, Mr Bendel cautions: "Running a successful restaurant requires experience, just like most other professions. It's just like if I want to become a banker tomorrow, I will fail, because that's not what I know how to do."
Calvin Kang is, admittedly, one such F&B industry newbie. The private equity banker-turned-restaurateur behind year-old modern Korean restaurant Namu in Boat Quay will be shutting the restaurant at the end of the month for a revamp.
Of the lure of restaurant ownership for bankers, Mr Kang, who set Namu up with former JP Morgan colleagues, says: "Bankers enjoy good food and after eating out so often, they eventually want to have their own restaurant where they can host their friends and family." Restaurants, too, are increasingly seen as lucrative alternative investments to the stock market, which is quite risky at the moment, he adds.
But having deep pockets can turn out to be a disadvantage. The common mistake by restaurant owners with a good shore of capital is that they are "concerned not so much about survival, but about making the restaurant look good," Mr Kang admits. "When our friends or former clients come, we want to impress them. But that's not the point of business, a business needs to survive."
He estimates that 60 per cent of his initial capital investment went into spiffing up his three-storey Boat Quay shophouse, a figure that, looking back, he would have capped at 20 per cent. "I now have a lot of respect for the restaurants that have lasted for years, because now I know how hard it is to run one."
Wise words, but not enough to deter bright-eyed hopefuls such as Han Liguang from entering the industry. The former management associate in a global bank left his job to enrol in At-Sunrice Culinary Academy and hopes to open his own restaurant serving modern experimental cuisine next January.
He cites the influx of foreigners, and the increasingly globalised palates of Singaporeans as plum reasons for entering the trade now, on top of the personal challenge of making it in a famously gruelling industry. "In terms of the diversity of food and restaurant concepts, the Singapore market can certainly handle more," he adds.
Like Mr Han, Gattopardo's chef Sauro predicts that the breakneck speed at which new restaurants are sprouting up will be something of a fixture for the next three to four years, and the industry will be able to absorb it. "Many locals still prefer to eat in hawker centres or at home rather than in restaurants on a regular basis. There is still so much demand that is untapped locally, on top of all the foreigners who are coming in," he says.