Coronavirus hits the hospitality industry hard

NAs the coronavirus continues to spread in our country and must be contained, hospitality business owners are seeing that the corona crisis is bringing about major financial consequences. The number of cancellations has increased by 48% and the number of new reservations remains low.

Research by KHN among nearly 4,000 hospitality entrepreneurs shows that 55% are experiencing more cancellations of existing reservations than normal and are experiencing an average revenue loss of 33% due to the various recommendations and measures. KHN expects that the negative consequences of the coronavirus will be noticeable for an extended period.

The results provide insight into the impact by region, but also by type of business. At the national level, unrest is now significant. At the moment, we see that Brabant and Amsterdam have been hit particularly hard, but with the new measures, we see that concerns among hospitality business owners from other regions are also increasing rapidly.

The revenue loss for March is estimated at 33% (or €630 million) and will increase to €700 million per month if the rest of the Netherlands follows the patterns of Brabant and Amsterdam.

Overall, it means a major liquidity problem because the operating profit, including owner's salary, is normally around €300 million. That cannot be bridged without government support. Certainly not for the small entrepreneur.

Follow the advice of the RIVM; guests remain welcome in the hospitality industry.

KHN understands the concerns of entrepreneurs, employees, and guests but trusts in the sound approach of the RIVM. It is important to follow the advice of the RIVM and local authorities. On Thursday afternoon, the crisis team advised cancelling all events with more than 100 people throughout the Netherlands. Museums, theaters, and sports clubs are also advised to close their doors for the coming weeks. For hospitality establishments, visits remain possible provided the advice is followed. However, hospitality businesses must also reasonably adhere to the 100-person limit. The new measures apply until at least April 1. Guests and employees naturally remain welcome.

RIVM advises

The RIVM (National Institute for Public Health and the Environment) advises the most important measures you can take to prevent the spread of the coronavirus:

• Wash your hands regularly
• Cough and sneeze into the inside of your elbow
• Use paper tissues
• Do not shake hands
• Do not go to a restaurant or bar if you have any flu symptoms, so that other guests can come as usual.

Source: among others KHN