WITH BANKRUPTCY HANGING OVER ITThe HoReCa industry rips on the government

F.A. (Translated by Cosmin Ghidoveanu)
English Section / 20 august 2020

Hurt badly by the quarantine, the HoReCa industry all over the world is suffering. Whereas in the first months the situation has been accepted without much discussion, after the appearance of the first easing measures the first complaints have started being heard. Locally, the actors involved think that the measures dictated by the authorities are disproportionate compared to the situation, and give examples from other EU countries, and accuse the Orban cabinet of being unwilling to have a dialogue. Restaurants that have been closed for months, thousands of unemployed people, protection measures which increase costs, the suspension of the activity in venues starting at 23:00, more recently at 24:00, are a few of the burning problems of an industry which is heading towards collapse. The Professional Association of Restaurants and Hotels in Romania (HORA) yesterday presented publicly, in a press conference, a chart from a EU database, according to which in 29 European countries indoor restaurants have been reopened, whereas in Romania they are still closed.

Specialists in this industry have proposed to the Government solutions and have presented some several concrete requests. HoReCa representatives are asking the Government to allow the reopening within the shortest delays indoor delays, in compliance with the rules against the spread of COVID-19; the ensuring of social distancing by keeping one free table between two occupied tables; the avoidance of the crowding of counters and bathroom stalls; the mandatory wearing of masks by customers going to the bathroom, or upon entering or exiting the restaurant. The HoReCa industry representatives have also said that they will ensure devices and virucidal substances needed for the customers' hands and provide usage instructions; that they will inform customers about the hygiene and social distancing rules, as well as about the need for limiting the meal serving time, where needed; that they will ensure the cleanup and disinfection with bactericidal and virucidal substances of the areas/surfaces which are accessible to customers and of the utensils used during the meals. They have also asked for the elimination of the requirement to wear gloves by waiters within the restaurant, stating they consider that direct and frequent hand washing is more efficient.

The representatives of the hospitality industry are also asking for the elimination of the industry-specific tax for 2021, respectively 40 million Euros a year, the regulation of the tips as income from other sources, which would make it exempt from the contribution to the CASS (Health Insurance State Department); the classification of affiliated groups as SMEs, if they don't meet the requirements for being classified as major companies; the focusing of audits made by the institutions of the state of compliance with the regulations concerning the spread of the SARS COV 2 virus.

Daniel Mischie: "The government carries the responsibility for the spread of the Covid-19 virus"

The president of the Romanian Professional Association of Hotels and Restaurants (HORA), Daniel Mischie, says that the Government bears the responsibility for the spread of the Covid-19 virus, by extending the ban on indoor restaurants, because customers resort to alternative solutions to skirt the restrictions: "You have destroyed the industry for an illusion! The illusion is that tourism is the main factor in the spread of Covid. People working in tourism - if you look at the seaside - there is no hotbed between the waiter, cook, taxi drivers, chambermaids. So the virus does not come from the seaside (from tourism, ed. note). Obviously it can come from transportation, from supermarkets as much as it can from tourism. So we are an industry just like any other. The biggest hotbeds are in fact in the local state institutions or in the local or central administration, in hospitals, that's where the infection hotbeds are. I don't think you've heard of any restaurant or hotel which has been completely shut down and have 80% of its employees infected with Covid. But (the virus, ed. note) exists in this industry just as it exists in the metallurgic industry and so on, we are not an out of the ordinary industry. So that is the illusion and that is what the Government is trying to sell, that the tourism industry could be the one propagating this virus. It is false, completely false! The interdiction of operation: essentially the Government carries the responsibility, that any restriction - if you think of the prohibition - it has in fact made other things devolve in parallel. We have looked at the Government's explanations or at those entitled to take measures concerning the obstacles raised before restaurants and we understand that a major part of those infections would come from tourism. And we have looked at what's happening at the seaside, where there are colleagues of ours, who have been working there since May, who, work as waiters, chambermaids, taxi drivers, restaurant managers, hotel managers, who are not infected. So normally, if the tourist areas were a hotbed, all of the people working there and who meet all their customers would be infected as well. The major infection hotbeds come from other industries and other departments, which we obviously are partners with, but we need to admit that there is no such problem in tourism. (...) Mr. Cîţu, you are playing with fire! We currently need financial input into the industry, we are at a deadlock when it comes to the receiving of the 41.5%, basically he support for salaries no longer exists. We understand that the budget has undergone a revision, but it should not be forgotten that we are an industry that has no earnings, we have paid these amounts to the state budget, we have waited for them to be returned and they haven't been. At the same time, we do not have financial flows into the industry, neither European grants, nor from the state. So the industry needs to be compensated somehow for that, through the European grants or, obviously, through support from the government. We are doing our job, we have investments, we have employees, the employees are coming in to work, but we are not allowed to work. They need to somehow compensate us for this. Don't you find it normal, if I have invested millions in a restaurant, for it to be allowed to operate? And if it is not, and they want to resolve the medical issue, they need to compensate me, it's the normal thing to do".

Dragoş Anastasiu: "The illusion is that by not allowing indoor restaurants to operate we are safe and we are protected against Covid"

Dragoş Anastasiu, the spokesperson of the Alliance for Tourism - organizations which reunites the tourism professional associations, mentioned several things concerning this crisis: "The illusion is that by not opening the indoor sections of restaurants we are protecting ourselves against Covid. We think that this is an illusion, that that is not the main cause. I don't know if people are wondering very openly what is happening in churches, what is happening in public transportation, what is happening with commuters. The illusion is that everything is coming from the HoReCa sector. When we ask (the government, editor's note) why we don't operate the same as everywhere else in Europe, the answer is "we are looking at the infection figures". Great! But what we have been asking for over four weeks now, has nothing to do with that. We have said the following: what do indoor restaurants at the seaside have to do with it, or those in the Danube Delta or in the tourist areas? Why should everyone going there huddle together in the outdoor venues, instead of the indoor areas being opened and people spreading across a wider area, in circumstances of safety and control? Why don't we allow the interiors in the malls, where there are controls? Why don't we open the indoor areas in spas, where there are controls? (...) Let's see why we have no cases in HoReCa, among our employees, but on the other hand (according to the Government, ed. note) we are the ones spreading the virus. So from that point of view, the argument doesn't hold water. I've asked another thing: if you open the indoor areas, in the summer areas, in spas, in malls, do you really think the number of infections will increase? And the answer has been that we are saying cannot be refuted. And so why aren't we doing what all of Europe is doing - open the indoor restaurants? We don't want a loosening, quite the contrary, we want measures that protect people, who are going into a relaxed area, they are can go into a controlled area, and we are expanding the available space. We have met no understanding so far. (...) We understand the politicians, because people want caution and it seems like reopening indoor restaurants would be careless, but we simply don't believe that is the case".

HoReCa employees have protested on August 19th in front of the restaurants and venues where they work, to raise the alarm on the future of those working in the industry. The HoReCa representatives had a message before the protest: "The government's ignorance is about to ruin one of Romania's most important industries! If you are working in or for the HoReCa industry, attend Wednesday's protest to raise an alarm on the future of the nearly 400,000 people employed in this industry". The Hora Professional Association (Asociaţia Patronală Hora) has sent an open letter to PM Ludovic Orban concerning the situation in that sector. Hora expressed his concern on the disastrous effects created by the spread of the Covid-19 virus in the hospitality industry, effects which are making themselves felt in the tourism industry all over the world: "The lack of predictability in the HoReCa industry in the current economic climate does nothing but push to the edge of the precipice entrepreneurs who have ongoing investments, major responsibilities to employees, rental and leasing contracts, contracts with foreign customers, service contracts, auxiliary services contracts etc. When it come to activity in other European countries, it can be seen that the HoReCa industry can work. Outside Romania, all the countries in the European Community have reopened restaurants (indoor and outdoor) with strict regulations, with compliance carefully monitored by the state, which have managed to maintain a far lower number of infections compared to Romania". According to the study ordered by Hora, together with the organizations which are part of the Alliance for Tourism (APT - Alianţa Pentru Turism), conducted over a period of five years, the contribution of HoReCa to the GDP is approximately 5.07%, as follows: direct financial impact (added value) - 3.42%; social impact (employee salaries and contribution to consumption) - 0.91%; indirect financial impact (suppliers and investments) - 0.74%. The document also mentions that the reopening of venues on June 1st has not resulted in an increase in the number of infected people: "We can conclude that the complete reopening of restaurants can be done safely, in locations that comply with the regulations. As could be seen, the increase in the number of infections came two weeks after the beginning of the holidays in tourist areas. In the absence of clear regulations, restaurants have encountered difficulties and the inability of the local and central authorities to monitor compliance with the rules has led to overregulation and abusive audits, many of them without any connection to the pandemic situation we are in".

HORETIM: "The current government bears the responsibility for the destruction of the HoReCa sector"

Professional Association HORETIM accuses the government of destroying the HoReCa sector through "totally disproportionate" measures when compared to the real situation: "There are no arguments for the shutdown of this sector, and the current government bears the responsibility for the destruction of the HoReCa sector through measures that are totally disproportionate in comparison to the real situation. 400 000 employees are directly affected by these unjustified restrictions, as well as approximately 210 000 employees and suppliers of products, raw materials and services. We want the interests of the hospitality industry to be protected and to support everyone who works in this sector". The president of HORETIM, Corina Macri, claims that, following the crisis caused by the quarantine and the restrictive measures implemented by the authorities, the HoReCa industry is currently the most affected, seeing a decline that has led to a turnover drop of about 70% compared to the first six months of last year and has led to the suspension of activity in the case of over 40% of the operators. According to them, restricting sales and consumption indoor does not solve the government's problems in ensuring compliance, and the restrictions are causing major losses to the hospitality industry as a whole - hotels, restaurants, cafes.

The protest, backed by the Coalition for the Freedom of Trade And Communication

The Coalition for the Freedom of Trade And Communication (CLCC) joined the initial protests initiated by the Professional Association of Hotels and Restaurants (Organizaţia Patronală a Hotelurilor şi Restaurantelor din România - HORA) compared to the manner in which the authorities are managing the fate of 400,000 employees in the HoReCa industry, which generates an annual turnover of 5 billion Euros. Constantin Rudniţchi, Executive Director of the CLCC states: "The lack of predictability concerning the time and the terms for the reopening of indoor restaurants can no longer be postponed through superficial statements that do nothing but perpetuate the confusion of the business sector and the uncertainty of the employees. The hospitality industry is currently being treated in a discriminatory manner compared to other segments, with the state effectively making decisions on behalf private investments and businesses without having nationalized them formally. The sacrifices that companies need to make to overcome the crisis caused by the quarantine are necessary, but the lack of interest of the authorities to find solutions for this sector, which they are pushing towards bankruptcy, has a domino effect in every related area tied to the HoReCa industry". The CLCC proposes the reopening of indoor restaurants within the briefest delays, just like in every other EU member state, in compliance with the rules against the spread of COVID-19. They are also proposing the elimination of the specific tax for 2021 and the classification of the groups of affiliate companies like a part of SMEs, if they do not meet the requirements for major companies, the CLLC, which reunites over 2000 companies, with a combined turnover of about 50 billion lei and over 36,000 thousand employees, think that economic freedom, freedom of trade and freedom of communication are fundamental, and public consultations are the foundation of a democratic society.

CĂLIN ILE, PRESIDENT OF THE FIHR: "We are on the edge of the precipice"

Hoteliers took to the street on August 19, as did representatives of restaurants from many cities all over the country, said Călin Ile, the president of the Federation of the Romanian Hotel Industry - (Federaţia Industriei Hoteliere din România - FIHR), who have expressed their hope that the protest would produce results.

Călin Ile told us: "We hope that the authorities will pay attention to us. Tomorrow (ed. note: August 21st) we will try an additional dialogue with the prime-minister to see his reaction, but for now we have no answer. We are on the edge of the precipice and with things going on the way they are, every month 5-8% of the operators give up - either they close their door, or they are not able to continue their business, they try to sell off, or enter insolvency".

According to him, so far, about 75% of the hotels are functional, and in the restaurant segment the situation is similar, approximately 10,000 of the 40,000 units are not operational. "Measures for opening and support, for financial compensation for the losses in these six months", he concluded. (E.O.)

DRAGOŞ ANASTASIU, TOURISM ALLIANCE PRESIDENT: "Everyone wants a controlled normalcy"

The government must do something so we can enter a controlled normalcy, says Dragoş Anastasiu, the president of the Tourism Alliance (Alianţa pentru Turism - APT). He told us: "I think a large majority of the HoReCa representatives have taken to the streets. The government must do something so we can enter a state of normalcy, or compensate us. We need to do what all of Europe is doing, we are not asking for anything special. All over Europe indoor restaurants are open, with rules that have to be followed".

Dragoş Anastasiu told us that the industry is currently facing a turnover drop of approximately 60%, in YOY. The head of the APT concluded: "We will publish a study in the coming days and we will see what the population says. I have the feeling that everybody wants to enter a controlled normalcy". (E.O.)

HEALTH MINISTER NELU TĂTARU: "It is not the time yet for reopening indoor restaurants"

For the moment, the time is not right for reopening indoor restaurants, says health minister Nelu Tătaru.

The official said on August 19th: "To the extent where we see a stabilization of the number of new cases from one day to the next, with a downward trend, we may take under consideration, according to some rules that must be observed, opening those restaurants as well. This is not yet the case at this time." (F.A.)

PRESIDENT KLAUS IOHANNIS: "New loosening measures are not possible, the Government is drawing up new aid schemes"

The government has drawn up and will continue to draw up aid schemes for entrepreneurs, president Klaus Iohannis assured. He mentioned: "We understand very well this concern in the HoReCa sector and we have to admit that it is the sector that has been hit the hardest by the economic crisis generated by the quarantine. To support entrepreneurs, the government has drawn up aid schemes and will continue to draw up such schemes. We are talking here about the public health of the entire population.

Considering the number of infected is growing daily, new easing measures are not possible. Until we enter a constant downward trend for the epidemic, there will be no other easing measures, but as compensation, the Government will bring new economic support measures".

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