The “insufficient” rescue plan for the hospitality industry will not prevent the closure of 100,000 bars this year

The Government defends that the Royal Decree Law on aid includes direct measures such as 880 million euros in deductions for the self-employed.

An empty terrace in Madrid in a file image.

Late, insufficient and with discomfort. This is how the hotel sector has picked up the rescue plan that the Council of Ministers approved yesterday to help the hotel industry together with commerce and tourism and that contemplates an impact of 4,220 million euros. It is a plan that covers up the drama in the sector, but does not help to curb the sad reality: 100,000 bars and restaurants in Spain will close at the end of 2020, that is, a third of the total.

Two months after the commitment that the Minister of Industry, Commerce and Tourism, Reyes Maroto, contracted with the sector, “she has not complied with the rescue plan that we need,” explains José Luis Yzuel, president of Hospitality in Spain.

What is missing from the promised plan? “We expected direct aid” and a “more ambitious” plan, but in the end it is “insufficient”, says Yzuel to Invertia. The sector claimed 8,500 million euros in direct aid; however, these have not arrived in this format.

The hotel industry explodes: bars and restaurants ask for a rescue plan in the face of the wave of closures

The hotel industry explodes: bars and restaurants ask for a rescue plan in the face of the wave of closures

“If the government does not launch a direct aid plan with the 8,500 million euros that we know are necessary to rescue the sector, we will go to a scenario of loss of more than a million jobs, between direct and indirect, and the closure of 100,000 establishments”, points out Jose Luis Yzuel. To date, there are 85,000 establishments permanently closed.

From the sector they remember that other countries have applied such aid. Germany has already launched direct aid of more than 10,000 million euros in addition to having approved significant VAT reductions and measures to promote demand. For its part, France has approved consumer bonds and grants direct aid for an amount of 10,000 euros per establishment.

The government defends

However, the Spanish Executive defends its plan. “I think this Government has demonstrated with all the breadth of measures that we have given direct aid,” said Reyes Maroto, who gave the example of the benefit to self-employed for the cessation of activity 880 million euros for 154,365 self-employed.

VAT rebates are not included either because “right now we don’t have a problem with prices, but with demand. If we want to be effective, we had to focus the plan on the problem of fixed costs. And we have focused on rentals, social contributions and lowering the social burden”, the minister pointed out.

Reyes Maroto: We work with the British Government to establish safe corridors with the Balearic and Canary Islands

Reyes Maroto: “We work with the British Government to establish safe corridors with the Balearic and Canary Islands”

“What we want is for the plan to be effective and immediate,” has defended. For this reason, it urges the CC. AA. to propose aid through the Covid funds of 16,000 million that were offered to the regions. In fact, next December 28 will hold a meeting with them to discuss these issues.

Other measures

Among the announced measures is the obligation of large property owners -those who own more than ten leased premises- to apply a 50% reduction in rents for the duration of the state of alarm, possible extensions, and four additional months more.

This measure will not affect more than 3% of the hospitality sector. Therefore, it is shown that “the plan falls short and lame and leaves thousands of families that depend on the sector unprotected,” adds Yzuel.

As for the ERTE, the extension of the ERTE due to force majeure is approved, incorporating bars and restaurants as protected sectors. “We are glad that this time our incorporation is being taken into account, but important details are missing and we will have to read the small print carefully,” Yzuel clarifies.

industry drama

It should be remembered that this plan arrives with some delay due to discrepancies between the Ministry of Finance and the Ministry of Economy, and in the midst of the weariness of a sector that has exploded. The sector will close with a 50% turnover drop, which translates into a drop of 67,000 million euros in 2020 (compared to the 129,000 million registered in 2019), according to Hospitality in Spain. Situation that puts 1.4 million jobs at stake.

And as for the future, Hospitality of Spain believes that recovery will not be seen until the end of 2021 or the beginning of 2022. And that in the best of scenarios. With this plan, nothing changes in the forecasts of the industry that sees a very complicated 2021. “We have been in ruins for nine months and this ruin has a bad fix”, they sentence from Hospitality of Spain to this medium.