Hotels in Argentina Collapse: How Many Would Close Forever

Thousands of establishments are one step away from definitively closing their doors. Much of the business community received no official aid

Affected by the absence of local and international tourism, and the lack of special aid to the sector on the part of the State, the bulk of Hotels Argentina is rapidly heading towards the final closure. Industry entities anticipate that, at this quarantine rate, in a period not exceeding 3 months will have closed 65 percent of the available accommodation in the country.

The percentage refers to 11,700 ventures that will go down in history as a result of the Covid-19 context. The activity talks about more than half a million jobs that will fall along with the blinds of the hotels.

The hotel segment, beyond the partial and specific openings that have been activated in recent days, lost almost all of its operations as of March 20. With Buenos Aires as the plaza most affected by this stop, activity managed to cover the stumbling blocks in April and May wages.

But in the sector they already recognize the impossibility of complying with all the amounts corresponding to this month. Both businessmen of the item consulted by iProfessional They also assured that directly they will not be able to pay the Christmas bonus.

The critical situation of the accommodations was reflected in a survey recently carried out by FEHGRA, the federation that brings together hotel and gastronomy entrepreneurs at the national level.

The monitoring showed that 65 percent of entrepreneurs acknowledge that “they will not be able to continue with their companies if the current situation is prolonged, “and he specified that the majority of these actors” consider that it will be closed in a period of between one and three months. ”

“80 percent of entrepreneurs applied for the ATP program and still only 41.7 percent were able to pay in full April wages. With respect to other costs for the April and May period, 72 percent stated the impossibility of paying rent; 33 percent were able to pay for services and 19.8 percent paid the taxes in full“, it is exposed among the conclusions of the survey.

“Almost half of the respondents, in April and May, requested bank financing, although of that group only 53 percent received it“, adds this FEHGRA work to which he agreed iProfessional.

Without official help, 11,700 ventures will go down in history as a result of the Covid-19 context.

Accommodation to be lost

In dialogue with this medium, Graciela Fresno, president of the federation, stated under these figures, “the country will lose more than half of its hotels in three months’ time

“The businessman who can resist the most in this context at most has the financial back to resist for another three months. The pandemic forced to close practically all accommodation. In Buenos Aires, for exposing an exceptional case, about 20 hotels are still open with the purpose of detaining people in quarantine. The rest, by sanitary provision, must be kept closed. And this is the sector in general since March, “he commented to iProfessional.

Fresno argued that the affectation includes the 18,000 hotels distributed throughout the country, but that on stage like the porteño the greatest complications are faced by accommodation of up to 4 stars.

“In the Federal Capital we have cases of hotels that have already closed definitively. Those who lowered blinds but are waiting for the return of activity do not know how much longer they can resist in this situation of uncertainty. Official aid did not reach all employers in the sector, so that the difficulties multiplied for the majority of the ventures “, indicated the directive.

“We are not questioning the effectiveness or otherwise of the sanitary measures that have been taken. We accompany the quarantine. But if there is no complement with economic measures, most of the sector will have disappeared in a matter of months. Let’s think that there are hotels that were not assigned ATP, reason why they had to continue paying in some way of their own the salary of the employees, “he added.

The interviewee assured that the accommodations “continue to receive full bills for water, electricity and gas, in many cases with estimated consumptions based on the expenditure of the same month but of the previous year “.

“Taxes, calculated that way because companies are not going to verify meters, they come down with amounts as if we were working at the highest capacity. They even charge the contracted power in electricity although the hotels are closed. That also works against the survival of companies in the sector, “he said.

The few hotels that were able to reopen in districts without coronaviruses are operating at 10% of their capacity.

The few hotels that were able to reopen in districts without coronaviruses operate at 10% of what they operated prior to the pandemic.

Urgent request for help

Fresno said that the openings allowed in some of the districts that have been accumulating weeks without new cases of Covid-19 did not greatly change the reality of the hotels located in those sites.

They work 10 percent of what they operated prior to the coronavirus. Only essential workers from certain companies are accommodated. Outside of that, the movement is practically nil. From that perspective, the payment of bonuses is impossible for the entire sector, “he said.

The head of FEHGRA commented that the segment is awaiting the approval of a law that declares the emergency of hotel activity.

Today 8 projects of that tenor presented in Congress. The parties do not agree on who will push any of these initiatives. It would be key for us that any of these projects be approved as soon as possible. The hotel industry will not be able to get through this moment without special help, “he concluded.

The closure of hotels in the Federal Capital has in the mythical Castelar to one of its most forceful examples, with a consolidated cease of operations at the beginning of May. But not only in Buenos Aires territory do these outcomes occur. In Iguazú, Misiones, the Grand Crucero -4 stars- closed its doors at the end of April.

“Wages cannot be sustained due to the lack of liquidity in the sector, no chance of opening during 2020“said one of its managers, belonging to the Crucero del Norte group, when communicating the decision.

In rosary beads, to cite another city hit by the pandemic, the traditional hotel La Paz has just announced the end of its commercial activity. And there is concern about the future of the Pullman City Center and the Solans chain ventures. Definitive closings are also happening in provinces such as Chubut and Formosa.

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