Tourism & Hospitality: Creating a catalyst for concrete support

Europe needs a dedicated taskforce focused on the recovery of the hospitality sector, explains Ivan Štefanec.
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By Ivan Štefanec

Ivan Štefanec (SI, EPP) is a member of Parliament’s IMCO Committee and President of the EPP’s SME Europe group

10 Jun 2021

At the end of last year, together with MEPs from across Parliament’s political groups, I wrote to European Commission President Ursula von der Leyen calling for the setting up of a COVID-19 recovery taskforce for the hospitality sector

 I also co-signed letters from colleagues, stressing the key importance of bars, pubs, restaurants and cafés, both to the economy and tourism and to the local communities in which these typically, small- and medium-sized businesses serve.

We must support such establishments that are integral to our European way of life. A sector that normally directly employs around twelve million people, hospitality is also a part of society that can boost the recovery of the economy as a whole, by restoring consumer spending and jobs as confidence returns.

“We are now entering a key stage, as Europe’s economies start to reopen, and recovery funds are unlocked”

As the vaccine rollout continues and countries start to get on top of the spread of the virus, governments are starting to open up their hospitality sectors, just as the summer arrives in the continent. At the time of writing, however, in some countries many hospitality businesses are still only able to offer takeaway services.

These are fragile times, and reopening is a necessarily cautious exercise, closely monitoring the epidemiological situation to ensure we avoid any further lockdowns that could prove terminal for many of these tiny businesses.

In most cases, it is still only outdoor terraces that are permitted, seated dining is the rule, and there are tight restrictions on the number of customers. Curfews are also often still in place and many venues still have to close early.

These ongoing restrictions have meant that many businesses have simply kept their doors shut, unable to turn even a small profit when operating at limited capacity, and understandably wary of the inclement weather keeping customers away.

A number of hospitality businesses have unfortunately already served their last plate or final drink; even government liquidity measures, unemployment benefits, fiscal support and insolvency funds were unable to keep afloat businesses that have lost over half of their trading in the last twelve months.

Conservative estimates suggest that the full recovery of the hospitality sector could take two years. This is assuming that there are no more lockdowns, and that the virus does not return – a situation that is by no means guaranteed.

This is, therefore, just the start of reopening and the real recovery will only gain speed when indoor spaces reopen, other restrictions are removed, and all places can return to being viable businesses.

When we think about the hospitality sector, we should not only consider the businesses at the final consumer end. There is a huge value chain of farmers, suppliers, producers and distributors ensuring that bars and restaurants can offer a service that welcomes and attracts hundreds of millions of customers every single day.

These value-chain businesses also rely on a thriving hospitality sector. By way of example, a recent report by Europe Economics highlighted that nearly 900,000 of the jobs generated by beer had been lost in 2020, compared to the previous year. Many of these were created not only by beer in the hospitality sector but also in other parts of the supply chain.

The report says a fresh €11bn in government tax receipts could be generated by beer sales if the hospitality sector fully recovers. We are now entering a key stage, as Europe’s economies start to reopen, and recovery funds are unlocked. Specific funds need to be directed to SMEs in the hospitality value chain.

“By studying the impact of COVID-19 restrictions on the sector we can then work together to implement a strategy that supports the hospitality sector in driving the recovery of the whole economy”

Support must now be strengthened and maintained through recovery funds targeted at the tourism and hospitality sectors, to prevent more good businesses going under. One particular policy that must be introduced and sustained is a reduced VAT rate in the hospitality sector. I was delighted when Belgium became the most recent country to introduce this, which has included the service of beer in cafés within the measure.

I was also pleased that, in the context of saving the summer tourism season, the European Parliament plenary recently debated EU support to the hospitality sector. Yet the issue reaches beyond the Parliament’s hemicycle; this should act as a catalyst for further concrete support to the hospitality sector.

That is why, together with fellow MEPs from across Europe and the political spectrum, I am writing again to the Commission President to invite her to address a launch event. The meeting should bring together policymakers from across the EU Institutions, along with and members of the hospitality sector coalition set up by European business associations and trade unions, to call for a specific hospitality taskforce.

By studying the impact of COVID-19 restrictions on the sector we can then work together to implement a strategy that supports the hospitality sector in driving the recovery of the whole economy.

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