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First figures for Covid-19, a European hotel business paralysed

The first returns from Q1 2020 highlight the gradual impact that the pandemic had on the European hotel industry. The results reveal a relatively unscathed first month of the year, launched on a strong Europe-wide dynamic, before suffering the first effects in February.

Under these exceptional circumstances, Hospitality ON and its partner OK-Destinations make the hotel performance statistics available for free access so that you can follow the news and keep updated in the best possible way.

But the Coronavirus epidemic mostly affected the following month, when the first impacts of Covid-19 were felt. Initially, a part of the European hotel industry suffers from the lack of Asian customers, particularly Chinese, whose travel outside is restricted or even prohibited.

Subsequently, the pandemic entered Europe, with a more direct and immediate impact on local demand. At the end of February, several countries had a declining income per room, in addition to Italy, which is under full attack and the most heavily impacted (RevPAR down -11.90%), there are also Greece (-6.50%), Belgium (-2.60%), Luxembourg (-2.40%) and the Netherlands (-1.70%).

But it is above all the month of March (looking back at the first half of the month) that is heavily impacted, when the WHO declared Europe as the new epicentre of the pandemic. A progressive closure of the borders of all the countries in the Schengen area and an almost systematic containment of the populations of each European state were thus imposed. The European hotel industry is losing on average one third of its revenue, up to 80% of its revenue (RevPAR) for Italian hoteliers.

 

European governments have thus put in place rescue plans for their businesses, particularly those in the tourism sector. In France, a number of exceptional measures, such as the delay in the payment of social security contributions and taxes due in March, have been put in place to allow the survival of a number of VSEs and SMEs in difficulty that make up the sector.

In Germany, a national plan for the return of travelling nationals was initiated. It has resulted in an unprecedented cooperation between the German airline Lufthansa and the national transport company Deutsche Bahn (DB). German tourists transiting through Frankfurt or Munich can use DB trains to return to their home cities, as Lufthansa's domestic flights are all cancelled. Bookings for Lufthansa flights are automatically transferred to DB so that Lufthansa customers do not have to make another booking on the DB platform. This means that they can take a DB train directly to their original final destination.

In addition to this alliance, the national plan also involves the German airline Condor (formerly a subsidiary of the Thomas Cook Group), which has increased the number of flights it operates until Sunday in order to bring as many German passengers as possible back into the country, in agreement with the German Federal Foreign Office.

On the Austrian side, a budget of 100 million euros was announced to be granted in the form of loans to small and medium-sized enterprises operating in the tourism sector. In Spain, the Federation of the Hotel Industry of Majorca (FEHM) welcomed the government's rescue solutions for businesses, such as exemption from the payment of social security contributions and the injection of liquidity to ensure their sustainability and start the business recovery as soon as possible.

Finally, while the airline Alitalia had been insolvent since May 2017, the Italian government decided to invest €500 million in the company to prevent its disappearance. This operation comes in the midst of the economic and health crisis of the Coronavirus, which has further weakened the airline, which had previously benefited from financial aid amounting to 1.3 billion euros from the government. This new injection of liquidity is part of the rescue mechanism established by the recently implemented italian decree, which provides for a budget of 25 billion euros to save companies in distress as a result of the Coronavirus crisis.

 

 

CARTE COVID-19
Coronavirus COVID-19 Global Cases by the Center for Systems Science and Engineering (CSSE) at Johns Hopkins University (JHU)

 

As a reminder, the Covid-19 coronavirus crisis currently raging in more than 150 countries has contaminated more than 200,000 individuals worldwide. The very rapid evolution of the epidemic in Europe shows an active outbreak, whereas, while it comes from the city of Wuhan (China), it is currently declining in China, following draconian measures imposed by the Chinese government.

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