Hospitality sector calls for support to unlock entrepreneurial spirit post-COVID

The hospitality sector has been one of the hardest hit by the coronavirus pandemic, putting the survival of companies in the sector at risk and millions of jobs at stake. [SHUTTERSTOCK]

Despite the challenges the pandemic has presented to the EU hospitality sector, hopes remain high that it can bounce back and adapt to a new post-pandemic reality, but this requires support “commensurate to the hit it has taken”, according to the EU hospitality association.

“We want to think about the reopening and we need some longer-term perspective, but we also have to be realistic – the priority now is to continue to have this support and make sure companies survive,” Marie Audren, director-general of HOTREC, the European umbrella association of hotels, restaurants and cafés, told EURACTIV.

Many companies are now on “lifeline support”, she warned. The hospitality sector has been one of the hardest hit by the coronavirus pandemic, putting the survival of companies in the sector at risk and millions of jobs at stake.

Figures from the EU’s statistical bureau Eurostat show a sharp decline of services production for hotels and restaurants during the first wave of the pandemic, the strongest of the entire European services sector.

In the same period, the room revenue per available room plummeted up to 90% for those hotels which remained open, according to HVS, a global consultancy specialised in the hospitality sector.

Such a decline is much worse than during the two previous crises for the hotel sector, following the global financial crisis of 2008-09 and terrorist-related attacks in Europe.

Restaurants, cafes and bars are also struggling to survive all across Europe, as many governments ordered them to close or limit opening hours in the face of surging infections.

This situation has also led to forms of civil disobedience like in Bulgaria, where struggling restaurants and nightclubs, forced to close because of the pandemic, have put in place unauthorised opening or thrown a series of illegal parties as a way of protesting.

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Strength in creativity

However, the sector is now also starting to look to the future, including the ways in which it can adapt to a post-COVID world and capitalise on the opportunities that will arise from the pandemic.

“The beauty of our sector is that we offer this diversity and creativity. My hope is that the pandemic will not kill a lot of this, but there will be new initiatives, new ways,” Audren said, adding that the sector’s entrepreneurial spirit makes it well placed to adapt to changing customer needs and demands.

Back in November, together with the EU’s trade union for food, agriculture and tourism (EFFAT), the association outlined a roadmap to build back the sector post-COVID.

In this document, the two organisations called on governments to include hospitality-tourism as one of the top priorities in the national recovery plans currently being drafted and that will receive funds in the context of the historic ‘Next Generation EU’ stimulus plan (NGEU).

Although much has changed in the interim, with the arrival of new mutant strains of the virus leading to a new wave of lockdowns across the bloc, Audren maintains that the roadmap not only remains relevant but has become “more urgent than ever”.

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However, for this to happen, Audren stressed that it is important that businesses are not just able to survive, but also to invest in longer-term solutions to the challenges facing them.

Besides targeted national and EU-level support, she also said that reducing VAT for the sector as it re-opens would be an important part of its recovery.

“The possibility to have reduced VAT will be very important, because you need to give companies the ability to keep cash flow and the flexibility to invest, both for their employees and for their establishment. So a reduced rate of VAT when we reopen would be a very important part of support measures,” she said.

Support must also be tailored to smaller businesses, who Audren points out have struggled to access the support on offer due to heavy and complex bureaucratic processes.

“Businesses can sometimes wait months or weeks before receiving support, and are using all their resources just to stay afloat,”  she warned.

Despite these challenges, Audren remained hopeful for the future of the sector.

“The crisis has also brought the realisation that the sector is the social glue of our societies and an important part of many cities,” she said, adding that she hoped the crisis would bring a renewed appreciation of the contribution of the sector to communities.

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[Edited by Benjamin Fox/Zoran Radosavljevic]

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