Bulgarian Association of Hotel Executives: Proposed stricter measures against Covid-19 will cause bankruptcies

Written by on November 24, 2020 in Bulgaria - Comments Off on Bulgarian Association of Hotel Executives: Proposed stricter measures against Covid-19 will cause bankruptcies

The stricter measures proposed by Health Minister Kostadin Angelov to curtail the spread of Covid-19 will deal a severe and in some cases fatal blow to many hotels, the Bulgarian Association of Hotel Executives said on November 24.

Angelov announced the proposed measures on November 23, against a background of the mounting death toll and number of active cases of Covid-19 in Bulgaria.

The proposed steps, still subject to Cabinet approval, include a shutdown of hotel restaurants and bars for some weeks.

“If adopted in the proposed form, these measures will deal a severe and in some cases fatal blow to many hotels, whose business in recent months has barely recovered from the State of Emergency imposed on March 13 2020,” the hotel association said.

It said that a recent survey that it had done had shown that “there is not a single case of coronavirus infection in a hotel in Bulgaria, which is indicative of the seriousness with which hoteliers treat the safety of their guests”.

The association said that the hotel business is a complex business that includes various synchronous “components”, one such component being the hotel restaurants.

If these restaurants are forced to close, in many cases this will lead to the closure of the hotels themselves, because they will not be able to provide basic food for their guests who spend the night.

This already happened in the spring, during the State of Emergency, when because of the ban on the operation of restaurants and spas, many hotels closed and their teams, built up over years, had to go to the labour exchange, the statement said.

“If the operation of hotel establishments is banned again, the social cost of the measures will be extremely high – thousands of employees left without a livelihood, who would hardly accept the arguments that all this is actually done for their good,” the association said.

If adopted in their current form, the proposed measures would result in mass bankruptcies of hotels, bankruptcies of hotel-related businesses such as food and beverage suppliers, among others, and “a complete catastrophe of the already emerging as an unforgettably weak winter tourist season in our country”.

The Bulgarian Association of Hotel Executives said that it was insisting that restaurants, spas, fitness and wellness centres not be closed and that the operation of hotels not be restricted before the government announces a programme with reasonable economic measures to compensate businesses and employees, which will allow hoteliers to avoid bankruptcies and those employed in tourism and related businesses to keep their incomes.

The association said that such a programme should include the state paying, for the duration of the new measures, 80 per cent of income before closing to cover staff costs while the employer should not be obliged to pay the remaining 20 per cent.

It said that the 60:40 payroll support programme should be extended at least until April 2021, with the option to extend to July 2021, and it should apply to hotels newly opened in 2020.

The association said that categorisation fees should be cancelled for the remainder of 2020 and throughout 2021.

Hotels shut down as a result of the anti-epidemic measures should be exempted from refuse tax, the statement said.

There should be a moratorium on installments for principal and interest on loans to legal entities and individuals in the field of tourism for the period in which the measures are in force, plus one additional month, which is the time necessary to restart the activities of hotels, it said.

“The association reminds that tourism provides a livelihood for thousands of people, including those from minorities and in areas with traditionally high unemployment, which makes it one of the most socially important sectors in the economy,” the Bulgarian Association of Hotel Executives said.

(Photo: Kevin Rutherford)

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