The situation in the restaurant and hotel business is becoming critical: in March, the turnover in the restaurant business fell from 30 to 90%, the drop in hotel occupancy was more than 50%. This is stated in a letter addressed to Prime Minister Mikhail Mishustin, signed by representatives of the Federation of Restaurateurs and Hoteliers (FRIO), the public organization “Support of Russia” and the Chamber of Commerce and Industry (CCI). The authors of the letter attribute this to the increase in the number of people infected with coronavirus infection and restrictive measures.
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Vedomosti got acquainted with a copy of the letter. Its authenticity was confirmed by the president of the FRIO, the chairman of the Opora Rossii committee for restaurant business and the chairman of the catering subcommittee of the Council for the Development of the CCI Consumer Market Igor Bukharov. Representatives of the largest restaurant holdings – Rosinter Restaurants, Restart Vasilchuk Brothers, Perelman People, and the Meat & Fish restaurant chain – also know about the letter. Vedomosti sent a request to the government.
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A number of government measures can support the industry and prevent a massive closure of restaurants, the authors of the letter say. Firstly, this is the exemption of all catering facilities and hotels from paying all taxes – up to 120 days from the date of lifting the restrictions established by the authorities in connection with the spread of coronavirus infection.
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For the same period, the business asks to introduce a moratorium on the collection of rents and utility bills. It is proposed to refinance the loans with the help of state guarantees, providing restaurants and hotels with credit vacations until the end of 2020. Also, the authors of the letter consider that a moratorium on checks of catering establishments and hotels for three years is necessary.
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All this will help to preserve enterprises and jobs and will allow to get out of the crisis situation as soon as possible after the pandemic, the letter says.
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The situation is terrifying, some members of the FRIO have been discussing the possibility of suspending work since March 18, switching to food delivery, Bukharov said.
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At the end of the year, restaurateurs will miss the turnover for two to three months, the founder of Rosinter Restaurants Holding Rostislav Ordovsky-Tanaevsky Blanco told Vedomosti. Already today traffic has fallen by about 40% compared with last year, he continues. Almost all of the country’s restaurants operate at a low margin of 3-7%, he recalled.
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Business may die, fears Alexei Vasilchuk, co-founder of Restart Vasilchuk Brothers, a restaurant holding company (Chaykhona No. 1, Depot. Moscow, 354 Exclusive Height Group of Companies, etc.): revenue on average in the market fell from 30 to 90% and continues to decline. “I suppose that soon we will work on delivery and on issuing guests orders with us,” says Vasilchuk. Business cannot cope without state support, he is sure: without it, in a couple of months a huge number of unemployed can be on the street. According to Ordovsky-Tanaevsky Blanco, about 20% of the country’s population works in the catering industry.
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Traffic fell by half, now only regular customers who are used to eating outside come to the restaurant, says Sergey Mironov, co-owner of the Meat & Fish restaurant chain, due to which it is unclear to pay rent and staff salaries.
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“Until an emergency is declared, we will work,” says Vladimir Perelman, founder of Perelman People (“My Fish, I Like Grill, I Like Wine, etc.). According to him, restaurants should become “temples of cleanliness”: the staff measures the temperature several times a day, tables are treated after each guest with 70% alcohol solutions, door handles, dispensers – every 30 minutes, bactericidal lamps work in the halls at night, Antiseptics are installed at the entrance to the restaurant.
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The largest Russian hotel operators (Azimut Hotels, Cosmos Group) and hotel owners (Safmar) declined to comment. AccorHotels promised to provide a comment later. One of the consultants working with hotel operators said that over the past month, the load of many Moscow hotels fell to 30–35%. He expects that as the quarantine measures on the part of the city authorities increase, this indicator will decrease even more. He recalls that during the peak of the epidemic in China, the average hotel occupancy there was about 10%. He also does not exclude the possibility that some hotels may even be completely closed and used to accommodate patients with coronavirus. However, according to him, so far these are only rumors.
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The decrease in hotel occupancy in Moscow is also confirmed by the owner of Ivashkevich Hospitality management company Stanislav Ivashkevich. Hotels, he said, very well tolerate financial crises. The Russian hotel market was seriously damaged only in 1993 and in 1998, when the cost of rooms fell several times and the owners and management companies were forced to reduce hotel staff. A similar situation, he said, is happening now, and lowering the price in this case will not help. A way out for hoteliers may be the temporary closure of hotels during the crisis, as is customary in countries and cities with pronounced seasonality, staff reductions and their transfer to a more flexible work schedule, Ivashkevich believes. According to him, if by the end of 2020 the average occupancy of Moscow hotels was expected to be at the level of 75%, now this figure is unlikely to exceed 50%. Accordingly, the total revenue loss will also be about 25%, the expert predicts.
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