ÖHV survey: More than 60 percent of the companies can only hold out financially for three to six months.
The outlook for the tourism industry remains bleak. The current winter season 2020/21 threatens to be a total failure. The month of March is “from the current point of view probably the earliest realistic opening date” for the establishments officially closed since the beginning of November, the Austrian Hotel Association stated on Friday. Even then, the hotels only expect a low occupancy rate of 30 percent, as a current ÖHV survey shows.
“That leaves such deep marks on the balance sheets, that is a clear mandate for politicians to act”, emphasized ÖHV General Secretary Markus Gratzer. With the current low demand and the bridging aid from the government, according to the industry survey, only 37.5 percent of companies can hold out for more than six months. The vast majority (62.5 percent) only last a few months: 28.2 percent said that they would run out of breath in three months, and another 34.3 percent will make it up to six months.
In the winter season of the previous year (2019/20), the occupancy rate in commercial accommodation had already decreased by more than a fifth – from 41.7 percent to 33.3 percent – and by more than a third in the corona summer 2020 42.1 to 26.3 percent, according to the latest statistics from Statistics Austria. The companies started this winter 2020/21 already weakened.
The loss of overnight stays in the past statistical tourism year (November 2019 to and including October 2020) noted by Statistics Austria has worsened in large parts of the industry with the start of the permanent lockdown in November, according to the ÖHV. The officially ordered closings resulted in a massive drop in sales. In the year before Corona, the leading tour operators had an average of 5.2 million euros in income, “in the corona-torn business year” these fell by more than half to just 2.5 million euros.
Brake on investments
In terms of investments, the hoteliers jumped on the brakes in 2020, which subsequently led to noticeable losses for contractors in the trade. Of the planned investment volume, 41 percent was postponed or canceled in the past corona year. According to the survey, 46 percent of the volume is likely to be eliminated for the time being or entirely in 2021.
“This clearly shows that the current financial instruments are nowhere near enough to ensure the survival of the businesses,” the hotelier association sounded the alarm. According to their own information, the entrepreneurs surveyed are best served by the revenue replacement, followed by fixed cost subsidies and short-time work.
According to the survey, the most urgent wishes are first of all the extension of the subsidies beyond June, the assumption of the vacation costs in the continuation of short-time working and the increase of the subsidy limits from 1 to 3 million euros.
“When the temporary aid framework was developed and decided, nobody knew how long and how hard the economy would be hit – now that we know more, everyone, politicians and companies, have to readjust, then we can do it,” said the ÖHV- Secretary General.
There is now a tailwind from the EU Commission for the well-known demands for higher aid caps by Finance Minister Gernot Blümel (ÖVP) and the hotelier association. EU competition commissioner Margrethe Vestager recently sent a proposal to the member states for consultation in this regard, and the aid programs are to be extended until the end of the year. “That now has to be implemented quickly,” said Gratzer.
Proposal for a new ceiling: EUR 5 million
As new upper limits, the ÖHV is proposing 5 million euros instead of 800,000 euros and 10 million euros instead of the previous 3 million. In addition to Vestager's proposals, the Hoteliers Association is in favor of a model that would help particularly hard-hit industries and regions the most: in the event of lockdowns, the “disaster paragraph” 107 (2) b should be applied. Because then the upper limits would fall for aid in these particularly difficult phases. “That would really be welcomed – the people in hard-hit regions and industries need special help, they have done nothing wrong,” stressed Gratzer.
500 ÖHV member companies throughout Austria took part in the survey mentioned. The results are representative of the quality hotel industry. According to the hotelier association, around half of the answers came from Tyrol and Salzburg.
