Dusseldorf Just how devastating the corona virus affects the German hotel industry can be seen from a look at Fairmas’ performance graphics these days. In Berlin, where the market research company determines daily occupancy rates for 260 hostels, the values fluctuated between 70 and almost 100 percent in April last year. This year, however, the graphic curve can hardly be found. With values of five and ten percent, it sticks almost to the X axis.
The statistics hide dramatic conditions. The Black Forest luxury and golf hotel Öschberghof, which is subordinate to the heirs of Aldi founder Karl Albrecht, almost turned into a ghost hotel on March 18, like many others. Since April 1, all 400 employees have been on short-time work with a zero percent share of work.
“The economic consequences are considerable,” complains even Motel One founder Dieter Müller, whose hotel chain is one of the champions in the German market. His company is expecting “a massive disruption in business development and a sharp drop in sales in the coming months”. Guido Zöllick from the German Hotel and Restaurant Association (Dehoga) even assumes that every third business is on the verge of bankruptcy.
Like Germany’s largest budget chain Motel One, almost all hostels sent their employees on a short-time basis. It makes the order of most of the federal states that overnight offers in Germany can only be used for “necessary” and expressly not for tourist purposes.
Booking.com in danger
The federal and state governments do not want to review this regulation until April 30th. Very few in the hotel industry believe that there will be a fundamental change. In addition, major events are prohibited in the houses at least until August 31.
Even the multi-billion dollar online broker Booking.com, whose headquarters are located on Amsterdam’s canals, says the Dutch government is asking for support. The world’s most expensive tour operator is said to be hit so hard by the pandemic that it would have to resort to layoffs without help.
The infirmity of the hotel industry in Germany began before the epidemic broke out across Europe. Already in January and February, when the corona virus kept almost exclusively Asian guests away from the German hotel market, hoteliers complained about an average occupancy rate of only 51.6 percent – a decrease of 20.6 percent compared to the first quarter of 2019.
In March things went downhill again. According to Fairmas, the occupancy rate dropped to only 29.3 percent last month, initially due to the numerous trade fair cancellations, and from mid-March then additionally due to the massive restrictions in numerous federal states.
Since then, visits to islands such as Sylt, Rügen or Usedom are no longer permitted, and hotels in these holiday regions had to close completely. In cities such as Cologne and Bonn, too, the administrations imposed an opening ban, which they later eased again later on under judicial instructions.
In most federal states, however, the following still applies today: Tourists must stay outside, only business travelers are allowed access. Of the 1,742 houses observed by the market researcher Fairmas, 40 percent have now temporarily shut down.
2.4 million employees
It’s about a lot. In Germany alone, the hotel and restaurant association has 223,000 “catering establishments” that together employ 2.4 million people. According to the German Tourism Association, tourist demand ensures direct gross value added of EUR 105.3 billion annually, which is almost four percent of the total German value added. 35.8 billion euros of this came from the overnight accommodation industry alone.
Extrapolated, the German vacation areas in March and April missed sales of 15 billion euros for gastronomy, day trips, sports, entertainment, leisure and culture – in addition to nine billion euros due to the lack of overnight trips.
As an urgent aid measure, the Dehoga is now demanding a seven percent lower VAT rate in the catering industry. “With seven instead of 19 percent VAT, the not inconsiderable loss of sales could be compensated a little because of the distance regulations that would then have to be observed,” said Association President Zöllick. The reduced rate would also help to be able to repay borrowings. A rescue and compensation fund for the hospitality industry is also on his list of claims.
He is apparently heard by the Federal Minister of Finance. In an interview with “Welt am Sonntag”, Olaf Scholz now promised hoteliers and restaurant operators financial support. “Of course, we look closely to see if and where we need additional help,” he said. “Above all, we have an eye on those sectors for which things are not getting off to a quick start.” The hotel and restaurant industry is certainly one of them.
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