SINGAPORE: It was early January when PUBking opened its doors to welcome its first customers. But the sight of merry partygoers clinking their glasses and singing their hearts out lasted for just two months before entertainment venues were forced to shut as part of COVID-19 control measures.
Nearly five months on, the karaoke pub in Outram remains shut as it is excluded from the list of businesses allowed to reopen.
Far from recouping their initial investment of more than S$100,000, its owners have been dipping deeper into their pockets to keep the business afloat.
Even with partial subsidies from the Jobs Support Scheme and rental reliefs, wages and other bills such as utilities have added up to about S$10,000 over the past months.
“No one opens a business to lose money … but so far, (this feels like a) waste of time, effort and money,” said co-owner Alvin Chua.
While restrictions have been eased gradually since June as Singapore reopens its economy in stages, a small number of businesses, such as those in the nightlife industry, remain barred from operating.
This includes night clubs, discotheques, dance clubs and some pubs and bars like Mr Chua’s.
This is set to continue, with Deputy Prime Minister Heng Swee Keat noting in his ministerial statement last week that such businesses “will not be able to open any time soon” due to safety considerations.
He said the Government will help these businesses to “transition to other activities or ease their exit”, with more details to come from the Ministry of Trade and Industry.
The Singapore Nightlife Business Association (SNBA) said the restrictions that remain in place have taken a toll on the industry, with about one-third of its 320 members still unable to reopen.
But even for those that have been allowed to resume business, as they have licences that allow them to operate as food and beverage establishments, there are mixed fortunes.
“Those that can provide some food are up and running but some of them are not doing very well due to the curtailment of drinking activities after 10.30pm,” said SNBA president Joseph Ong, adding that current restrictions on live entertainment are not helping.
Mr Chua, the pub owner, said he knew of some nightlife operators that have thrown in the towel, while some have scrambled to start serving food so as to resume operations.
The idea of change is not lost on him and his partners, but it is “not that easy”, he said.
This involves submitting a “change of use” application to the Urban Redevelopment Authority and a separate application to the Singapore Food Agency for a licence change. And if granted, this would mean entering a crowded F&B market.
“Pubs like us are all about selling drinks and allowing people to have fun, so the closest will be to become a bistro or restaurant that sells drinks. But if we all pivot into that, there will be so many bistros and restaurants in Singapore,” said the 38-year-old.
“This may be hard to sustain, especially if the operating time is reduced to until 10.30pm. I think it may be a desperate move just to minimise losses for now.
“And if we want to change back eventually, it is not guaranteed that we can get back our public entertainment licence, which is the one that allows us to have the karaoke activities. That is also what we are worried about,” said Mr Chua.
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A change in business model is also an uphill task for karaoke joints, according to operators of these businesses which similarly have had to stay closed under current rules.
Apart from worries about a tedious process in applying for a licence change and competition in other industries, these operators said there are challenges unique to their business given how their premises are partitioned into private rooms.
“When your entire shop is set up to be a karaoke venue with private rooms, changing it to something else like F&B is, I would say, almost impossible,” said Cash Studio Family Karaoke’s owner Caine Poon.
“A change into escape rooms or gaming rooms may be more likely, but demand is uncertain.”
Mr Simon Sim, one of the owners of Karaoke Times, echoed that: “I have 11 rooms in my outlet. For a kitchen to work, how many rooms must I tear down? What kitchen equipment will I need and even if I get a professional to help me and invest tens of thousands into the equipment, will a consumer give me a chance?”
Mr Poon argued that the risk of contracting COVID-19 in a karaoke room “is no higher than” F&B outlets, or perhaps even lower with groups of customers “separated by actual brick walls, instead of 1m spacing”.
The businessman, whose karaoke chain has been in operation since 2002, said he also submitted to the authorities a list of safety measures that his seven outlets will put in place should a reopening be granted.
This includes having a 2 sq m per person rule to determine the capacity of each room, with the maximum being five people. Each room will also only be turned over twice a day.
“This is totally not profitable, but we’d do anything to reassure people and be able to reopen,” he said. “I just want to keep my employees, pay my rent and not be decimated when this is over.”
For Mr Sim, having zero income from his karaoke business, which opened in City Square Mall last May, meant that he had to let go of his only employee in March. After tapping on his savings to support his family over the last few months, he is thinking of throwing in the towel to cut losses.
And he is hardly alone, said Mr Sim, who is a committee member of the Singapore Entertainment Affiliation which represents more than 100 karaoke operators.
“Among our members, I think half of them want to quit … With the restrictions, the Government has only given us one solution and that is to close.”
But pulling down the shutters may not be an easy way out.
“Malls will usually require you to find a new tenant if you give up your unit before your lease is up. If you don’t, you have to pay up the remaining rent on your lease,” said Mr Sim, who has about 18 months left on his tenancy agreement.
With all these concerns, industry players said they need help urgently.
The Government can do so by supporting affected businesses in three areas – to pivot, hibernate or exit, suggested SNBA’s Mr Ong.
For businesses taking the plunge to make the transition to other business activities, grants to help subsidise costs, as well as consultants who can offer guidance, would be useful, he said.
A temporary licence change could also be granted so as to help businesses cope with the licensing requirements, added business operators such as Mr Chua and Mr Poon.
A long hibernation until the third phase of the reopening may also be an option for some businesses, said Mr Ong, adding that rental help would be necessary in these instances.
Lastly, there are business owners who may be better off with an exit.
“Not just rental contracts, there are many other supplier contracts that will require a lot of unwinding and support can definitely be given. The last thing we want is for the operators to have a messy and a long-tailed exit.
“Because if that’s the case, all these operators with the know-how will not be able to get back into business when things return to normal. That will be a lose-lose for everyone,” said Mr Ong.
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SNBA said the Government’s latest support measures, most notably the extension of wage subsidies to March next year, suggested that COVID-19 curbs will likely remain in place until then.
Business owners need to manage their expectations and start planning for their future, said Mr Ong.
“We hope the Government will support businesses in every way - if not allowed to reopen, then help them to pivot to another business, or to hibernate or to close.
“It has come to the stage where we need to find a way out for these businesses and more importantly the people they employ,” said Mr Ong.