A chef prepares dishes at a hotel in Yangzhou, Jiangsu province. An official at the Ministry of Commerce said the combination of the mainland's huge market and Hong Kong's management expertise in the catering and hotel industry would create a win-win situation for both sides.?[Photo / China Daily]

With the Hong Kong catering and hotel industry relatively saturated, those involved in the business should turn to the mainland market, which offers plenty of opportunities, a senior official from the Ministry of Commerce told the China Daily on Tuesday.

Speaking on the sidelines of the China Hotel Hong Kong Forum, which focuses on the catering industry, Deng Tingfu, division director of the circulation industry promotion center at the Ministry of Commerce, said the combination of the mainland's huge market and Hong Kong's management expertise in the catering and hotel industry would create a win-win situation for both sides.

"There are many successful catering companies in Hong Kong, like the Paramount Catering Group and Maxim's Group," Deng said, adding that these companies should boost communication with their peers on the mainland and explore the vast opportunities.

Deng also urged catering firms on the mainland to enhance cooperation with each other and with Hong Kong businesses in order to become more competitive.

The potential of the catering and hotel industry on the mainland is significant, but the scale of individual companies is relatively small compared to their overseas peers, he said.

In order to become larger and more competitive, catering firms on the mainland need to work closely, Deng said.

Li Kwok-hung, managing director and general manager of the Hsin Kuang Restaurant in Hong Kong, agreed with Deng.

Li said that the operating environment of the catering business in Hong Kong is tough, due to constantly increasing rents and wages and a labor shortage.

"I believe that the catering market on the mainland is better than it is in Hong Kong," said Li, adding that the Hong Kong market is saturated.

Speaking at the forum, Deng said that, along with the mainland's urbanization and consumption patterns upgrade, the catering business has been expanding rapidly in the last 20 years.

The number of companies involved in the catering industry on the mainland is over 20,000, with the sector employing more than 2 million people. The industry's average revenue is about 2 trillion yuan ($313.80 billion) a year, said Deng. He expects revenue to increase 15 percent annually in the next four years.

Wan Jun, director of Beijing Xiangeqing, an A-share listed catering company, echoed that view.

He said his company started from a very small restaurant in Shenzhen in 1995.

Due to the rapid expansion of the catering market, Beijing Xiangeqing was publicly listed in 2009 on the Shenzhen Stock Exchange, with a market value of more than 5 billion yuan.

"China is rich in population and has a vast territory, so a catering company can become a world famous brand just by focusing its business in China," he said.

sophiehe@chinadailyhk.com