100,000 bars and restaurants will close drowned by the crisis

The bars and restaurants of Spain are dying. The situation was already complicated in summer, after three months closed and the lack of international tourists, basic for many locals from certain areas of the country. But with the new restrictions on the closure of the hospitality industry applied by several autonomous communities to face the second wave of the pandemic, many of these businesses will be forced to close down.

Specifically, about 100,000 establishments, a third of the total, which will not bear this year’s losses. These are the forecasts of the Spanish Hospitality Business Confederation (CEHE), which in July estimated that they should close between 65,000 and 85,000 bars and restaurants, but that with the new limitations they have had to update their already bad expectations. Your president, Jose Luis Yzuel, explains to this newspaper that some 700,000 jobs are at stake. “In August, 300,000 jobs had already disappeared in the sector, and some 400,000 people were still in ERTE, of which the majority will not work in their company again because they will disappear,” he laments. Across the value chain, it is estimated that up to one million jobs will be destroyed.

This places us at employment levels of 20 years ago, since since 2000 the sector has gone from employing just 900,000 people to more than 1.8 million. Nowadays, more than half of the job destroyed in the last year corresponds to the hospitality industry: of the 430,000 members who have been lost in the last twelve months, more than 265,000 are a direct consequence of the paralysis of the activity that businesses such as bars, restaurants or bars are experiencing. Up to the point that although employment is falling 2.2% in annual rate, the collapse in this sector reaches 20%.

8,500 million euros needs the sector in direct aid, according to CEHE calculations, in line with the plans approved in France or Germany
help needed

But not only that. In addition, many of the more than 1.1 million affiliates in this sector are not even working, but are affected by an ERTE. Currently, of the 600,000 workers who are still in an ERTE, more than 211,000 are from the hospitality industry, which means that more than one in three currently affected by an ERTE are workers in this sector.

And this debacle carries over to the self-employed as well. In the last two months more than 8,000 freelancers have been lost in this key sector of the Spanish economy, which means that every day an average of 140 affiliates have withdrawn from the RETA. Only in October the hospitality industry lost 4,973 freelancers, which represents a fall of 1.5%, thus ranking as the most damaged sector.

Only 3% of infections

Yzuel considers that the most serious thing is that the hotel industry is closing when the contagion figures do not exceed 3.2%, according to data from the Ministry of Health itself, and the casualties due to infections of its staff do not exceed 5.2%, compared to 30% of the health sector. Therefore, he believes that sometimes the closure of the hotel trade is used as a “smoke screen”: “They are being struck blind because they do not know how to stop the pandemic,” he says.

For this reason, businessmen in the sector demand direct aid to survive, as in other countries. According to his calculations, 8,500 million euros would be needed so that the restoration could go ahead and reduce the impact on the public coffers derived from the closure of businesses, such as the reduction of VAT collection, Corporation Tax and Social Security contributions. The tourism crisis has a lot to do with it: for 12 million international tourists who visit us each year, their main motivation on the trip is gastronomy. “This is a model that is not replicated anywhere else in Europe,” he says.

The ‘Together with the Hospitality’ platform made up of FIAB, Hospitality of Spain and AECOC, require the same direct aid to the hospitality sector as in Germany and France. Specifically, Germany has already approved 10 billion and VAT reductions. France will grant up to 10,000 euros per establishment and has extended the ERTE until 2022.

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