Irrevocable Damage in Case of Third Closure

Article by the Association of Catering Establishments (ACE)

Most catering establishments claim that with the COVID-19 Government voucher scheme they have maintained revenues, if not increased, during the summer period. There is a minority who claims otherwise and the odd few that did not accept the vouchers. Others have been creative and added loyalty and discount schemes to the vouchers issued by the Government.

A number of members of the Association of Catering Establishments participated in an additional voucher scheme complementing the Government vouchers. To assist further the Government have continued to issue the wage supplements.

It would have been an extremely good summer should the 11 July 2021 panic measures have not occurred. Indeed, the number of tourist reservations was encouraging, until then, given the circumstances - thanks to the excellent work done by the Malta Tourism Authority and stakeholders at large. In spite of all, Malta has still recorded a considerable number of visitors with September showing positive statistics.

To a certain extent one may say that a larger number of tourists may have damaged Malta’s reputation given that the hospitality industry has not recovered in terms of number of staff leaving the industry or leaving Malta. It is estimated that approximately 30,000 persons left the hospitality sector. Therefore, many hotels and catering establishments ended up with skeleton staff and could not serve a larger number of customers. The challenge is still here - even due to travelling restrictions.

During the last two years Malta has lost some 20 percent of catering establishments in spite of the positive measures aforementioned. Businesses take decisions on a longer term than the three Summer months. Many catering establishments had – and still have - exorbitant rents whereby many landlords failed to recognise the unprecedented circumstances. Furthermore, there are other fixed costs throughout the year and also during the closure of restaurants or when people were afraid to go out to dine. Consequently, some had to call it a day and close shop in order to mitigate the damages.

Needless to say most of those who survived did so predominantly thanks to the voucher scheme and also to the wage supplements. A common concern now is what will happen post-September, when the effect of vouchers has been diluted and the low season kicks off. Will the sales be maintained to cover the costs and the effects of the months of closure? Moreover, what will happen in January 2022 when the wage supplements will be stopped?

The main concern however, is what will happen if there is a strong third wave. Most catering establishments cannot sustain a third closure. The Health Authorities cannot but consider this important factor and perhaps refrain from taking decisions which are not based on scientific research. For a number of months the Association of Catering Establishments has been calling for scientific evidence that the virus is transmitted aggressively in catering establishments.

Despite this not being provided, catering establishments were for various months the sacrificial lamb and were imposed significant measures and two long closure periods. It is time to reduce measures further given the 91% vaccination rate. A third closure cannot happen as certainly there will be irrecoverable long term damage to the industry.