Coronavirus is Armageddon for Hospitality Sector

Total Croatia News

ZAGREB, April 3, 2020 – Turnover in the hospitality sector has dropped over 90% in the two weeks since the closure of establishments and due to social distancing and uncertainty about reopening, the COVID-19 pandemic is “Armageddon” for the sector, says the president of the national association of bar and restaurant owners.

Locally and globally, bar and restaurant owners will be the hardest hit by this pandemic, Marin Medak tells Hina, voicing more concern about “what will happen, because recent estimates that at least 30% of establishments could be open in early July are no longer that optimistic, especially for restaurants and all other establishments where food is prepared and served.”

He says the turnover drop of over 90% in accommodation and restaurants in the last week of March is expected but also shocking because the prospects for the next two to three weeks, possibly longer, are very bad.

That’s why, he says, he calls the impact of COVID-19 on restaurants, cafes, bars, catering and the entire hospitality sector as “Armageddon” because they have very limited possibilities to keep or repurpose their business.

“Absolutely everything or nearly everything has stopped. Some restaurants deliver food or operate drive-ins, but that accounts for only… 3 to 6% of the turnover which, combined with the demanding measures for the protection of delivery people and delivery in general, is untenable for many, as well as expensive.”

Medak says bar and restaurant owners will utilise government aid for staff and business.

The hospitality sector employs about 110,000 people, nearly half of all those employed in tourism and hospitality, according to his association.

Some employers have decided to keep their staff but many, notably small ones, simply can’t if their turnover is zero kuna, which is now the case with almost everyone.

Since it is difficult to expect any business in the hospitality sector before the summer, Medak says his association and the Entrepreneurs’ Voice initiative believe that payments should be written off, not deferred.

If the sector manages to do some business in July, August and the rest of the year, it will hardly exceed five to seven billion kuna, and the annual decline could be about 70%, he says.

Even when movement restrictions are lifted and bars and restaurants reopen, it will be tough on them because the question is how much customers will be able to afford, Medak says, adding that it might be easier for cafes with outdoor space.

“If restrictions are lifted by summer, we propose cancelling motorway tolls so that people in Croatia can drive more and visit various destinations and thus be able to more easily afford what the hospitality sector offers.”

More coronavirus news can be found in the Lifestyle section.


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