Call for Next Covid Stimulus to Prevent Job Losses in Tourism

By , 06 Nov 2020, 17:11 PM Travel
Call for Next Covid Stimulus to Prevent Job Losses in Tourism slovenia.info

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STA, 5 November 2020 - The closure of restaurants, hotels and other tourism facilities in the wake of Covid-19 has put companies in the sector in an unenviable position. Some have already been forced to lay off staff, but most of them are hoping the planned sixth stimulus package will help preserve jobs.

The key measures to protect jobs in tourism and hospitality would be to cover the total cost of the furlough scheme and to compensate business for income loss.

Unemployment was not on the rise in Slovenia in October despite partial lockdown. The companies did not repeat mistakes from the first wave of the epidemic when they were quick to let go workers and re-hire them after the government measures stepped in.

The Gorenjska unit of the Employment Service received only one announcement of major downsizing in tourism and hospitality in the autumn, Drago Perc with the unit told the STA, noting that one company said it would lay off some 30 staff.

Many companies are making use of the furlough scheme in the meantime, however Marcela Klofutar, manager of Vila Podvin and Linhart hotel in Radovljica, believes that the measure is not sufficient.

In the spring businesses were refunded the entire compensation for furloughed workers, meaning 80% of their pay, whereas now they only get EUR 870, which means that employers have to cover the rest, that is at least EUR 1000 per gross pay, she said, adding that businesses closed due to the epidemic cannot afford that.

Numerous companies in the sector are without any income. Vila Podvin is trying to get by until the sixth stimulus law is passed to see whether the pay compensation measure would be the same as in the spring.

"If that is not the case, people would have to register as unemployed," she warned, pointing to Austria as an example of good practice since the country has ensured compensation totalling 80% of last year's revenue.

Sava Turizem, one of the major Slovenian tourism companies, is also stressing the importance of stimulus measures. If the government does not endorse measures proposed by the tourism sector, then layoffs could not be avoided, said the company.

Given the sector has been worst hit by Covid-19 ramifications, additional boosts are necessary, including direct one-off aid to offset losses and a new edition of holiday vouchers, said Sava Turizem.

Meanwhile, some are not relying on government support but only on themselves. Matija Blažič, managing Hotel Ribno in lakeside resort Bled, has already laid off 40% of his employees.

"If the state measures were sufficient and announced in advance, it might have been different, however everything is passed last minute in Slovenia," he said.

"There does not exist a tourism company that could pay the entire team for half a year without work." Lakeside resort Bled might see better days around Easter next year, according to him.

A pessimistic outlook for the winter tourism season is shared by Janez Hrovat, the mayor of mountain resort Kranjska Gora and also a businessman trying to survive in the struggling sector.

He believes many, particularly those who invested heavily prior to the epidemic, will be in trouble and hopes the second wave will bring similar measures to those in the first.

Blaž Veber, the head of Turizem Kranjska Gora, has also urged stepping up boosts and following the examples of Austria and Germany regarding compensating revenue loss.

He believes the government measures have been effective so far, however the situation is worsening and the sector does not require help but compensation since it is not its fault it cannot function. It would probably take years to get to the pre-Covid level, he added.

Many providers of tourism services as well as owners of bars and restaurants are also concerned about having generated negative cash flow during the coronavirus crisis, which is thus expected to be followed by the debt crisis, heard yesterday's online debate on tourism after Covid-19.

The discussion, hosted by the Ljubljana School of Economics and Business, featured the head of Fraport Slovenija airport services Janez Krašnja, the head of the Association of Slovenian Hoteliers Gregor Jamnik and restauranteur Martin Jezeršek.

The last two urged the government to provide grants in the sixth stimulus package, warning that the debt crisis would halt the development of the sector.

Krašnja meanwhile said that the aviation industry has had a catastrophic year and that the recovery could last until 2024 at the minimum.

However, air passengers are still expected to be those who spend the most and the industry will have to adjust to the new normal, he said, adding that coronavirus tests could become part of airport checks in the future.

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