Hospitality in meltdown: devastated businesses warn ‘help us before it’s too late’

With all the so-called ‘good news’ of the virus situation improving, the truth is the embattled hospitality sector has yet to see any kind of light at the end of the tunnel.

The government programmes and Apoiar Restauração (designed to support catering and small businesses through the pandemic) “have reached the limit of their proposed budget, yet more than 21,000 businesses connected to tourism and catering “haven’t managed to pay staff salaries for January”, warns Portuguese hospitality association AHRESP.

AHRESP has been sounding warnings since the first lockdown, saying it has “continuous evidence of dismissals and companies at the limits of their survival”.

Business concerns that had ‘everything going their way’ before restrictions came into place are in clear and present danger of irretrievably collapsing unless well-targeted additional help is forthcoming.

The worst of the situation is that even if the lockdown were to start easing today (which it most certainly won’t), 65% of hospitality businesses have accepted that they won’t see one tourist this month.

It’s a Catch 22 of the worst kind.

Explained AHRESP’s Ana Jacinto on national television on Monday: “We cannot stay closed, without making money and without any kind of financial balance. The government has to have the capacity to help. We represent 400,000 jobs…”

According to the latest study by AHRESP, around 79% of restaurants registered losses of more than 60% in January; 44% had to dismiss staff and 51% were shut altogether.

When it comes to tourist accommodation, 56% of companies registered losses in revenue of over 90%.
February will be even bleaker, due to the ongoing lockdown, which is unlikely to ease before mid-March (see below). 

As AHRESP puts it: “The situation is very worrying.” Increased timely government support looks like the only possible way businesses will survive.

The Apoiar Rendas (commercial rent support) programme, for example, was announced in December (before anyone realised a second lockdown was coming) and ‘closed’ before many companies could take advantage of it once confinement kicked in.

AHRESP, therefore, has come up with what it terms the “Unique Support Mechanism for Businesses”.

Says Ana Jacinto, it will need State input of around €150 million and it will need to be devised so that businesses get ‘easy, simplified, concentrated access’, with one candidacy affording various means of support.

The government this far has said nothing. But finance minister João Leão admitted on Tuesday “we have to avoid the danger of removing support to the economy too early”.

This will mean significantly reviewing the macroeconomic scenario for 2021 and reviewing the budgetary deficit upwards.

The ‘safe pair of hands’ entrusted with the country’s finances as Covid-19 started razing it to the ground has said that, “in spite of a challenging trimester”, he remains “convinced that we will manage to enter a phase of frank recovery”.

Indeed, he told parliament on Tuesday he believes it is possible “to attain an economic recovery on a par or very similar” to what Portugal had pre-pandemic “by 2022”.

Cafés and restaurants stay closed to end of April, claims tabloid
With no-one in government volunteering a road-map yet out of lockdown, tabloid Correio da Manhã dropped a bombshell over the weekend with a front-page spread proclaiming ‘cafés and restaurants stay closed to end of April’.

It was a story widely repeated by other news sources, and singularly unchallenged.

Said the paper which many deride for being sensationalist: “The government will only start lifting measures once the number of new infections falls to around 2,000 a day, which could happen by the third week in March.

“Cafés and restaurants are expected to stay shut until the end of April.”

CM did hazard a roadmap out of lockdown: “There is the chance of some kind of light relief” of current measures in March – and from the beginning of April “the country will start being released from confinement”.

Tuesday’s ‘virtual’ meeting of experts at Infarmed (the country’s medicines authority) with members of the government did seem to confirm CM’s forecasts in as much as both prime minister António Costa and health minister Marta Temido admitted ‘confinement needs to be prolonged’.

Ms Temido gave the closest indications of a developing timeline: “It is quite evident that the current confinement has to be extended for a longer time, starting now during the month of February and then subject to an evaluation but probably for a period that experts today estimated at 60 days from the start.”

This led journalists to count back to mid-January – when the initial lockdown came into place – and realising that 60 days would get us to mid-March.

Quizzed over “eventual alterations to the model of confinement and the gradual lifting of restrictions”, Ms Temido said this “will have to be addressed at a later moment”, referring to resolutions (to come) from the Council of Ministers, and ‘decrees by the President of the Republic’.

PM Costa was equally evasive. Over Twitter, he simply stressed that “current confinement is producing results against Covid-19, but we need to prolong it due to the elevated levels of the pandemic”.

The secondary message coming out of Tuesday’s meeting was the need to “continue to invest in mass-testing and the capacity to trace” contacts of people found positive.

Mr Costa’s message to the country is that citizens’ confidence in the vaccine appears to have increased, to the point that there seems every likelihood that 70% of the country will take their jabs and thus afford Portugal the chance of ‘herd immunity’.

Reading between all these lines is a massive question mark over Easter. With Portugal still considered a ‘red listed’ country for its main tourist market, and land, sea and air borders still tightly controlled, there is little chance of much in the way of holidaymakers from abroad. But will the country be less hidebound by rules and regulations? 

As we went to press, Público suggested that it may well be, running with the headline: “Confinement will only end after Easter.”

President Marcelo Rebelo de Sousa is due to address the country this evening (Thursday), by which time parliament will almost certainly have approved an extension of Portugal’s current State of Emergency to continue to March 1.

[email protected]