Danube Delta Tourism Operators Estimate 98% of Hotels and Guesthouses Will Face Insolvency Within Two Months Without Government Support

Nearly 98% of hotels and guesthouses in the Danube Delta are already facing major problems due to the crisis generated by the coronavirus and will enter insolvency within a maximum of two months and, subsequently, bankruptcy, if the Government does not quickly come to their support with concrete measures, reports the Danube Delta Tourism Destination Management Association (AMDTDD), joined in its efforts by the majority of the hospitality industry in Tulcea County and the seaside.

Among the measures requested by the Delta operators, which could save tourism in the area, are the exemption from paying taxes and duties for companies operating in tourism in the Delta and on the Seaside until the end of this year, the allocation of funding sources from European funds for tourism, for the modernization of accommodation spaces in deltaic and seaside tourism and the development of support services to increase competitiveness, the extension of the regulatory scope of technical unemployment for tourism employees with employment contracts suspended or terminated as a result of the declaration of the state of emergency, and the elaboration by the Ministry of Health of the sanitization procedure for accommodation spaces that were offered as quarantine spaces and its publication as a matter of urgency.

“In this case, nearly 5,000 tourism employees in the Delta and Tulcea County will lose their jobs, local communities will no longer have means of subsistence given that deltaic tourism has an important component based on Local Gastronomic Points and family tourism, and tourists wishing to visit the Delta will no longer have accommodation options in the coming years,” stated Catalin Tibuleac, president of the Danube Delta Tourism Destination Management Association.

According to the specifications in the Temporary Regulatory Framework adopted by the European Commission, EU member states are allowed to provide additional support in the context of the coronavirus epidemic and grant five types of aid:

(a) direct grants, selective tax advantages, and advance payments: member states will be able to set up schemes allowing for the granting of funding up to EUR 800,000 to an enterprise to meet its urgent liquidity needs;

(b) state guarantees for loans contracted by enterprises from banks: member states will be able to provide state guarantees to ensure that banks continue to grant loans to customers who need them;

(c) subsidized public loans for enterprises: member states will be able to grant enterprises loans with favorable interest rates. These loans can help enterprises cover immediate needs for both working capital and investment;

(d) guarantees for banks that direct state aid to the real economy: some member states intend to rely on the existing lending capacities of banks and use them as a support channel for enterprises, especially for small and medium-sized enterprises. The framework clarifies that such aid is considered direct aid to the banks’ customers, not the banks themselves, and provides guidance on how to ensure that the distortion of competition between banks is minimal;

(e) provision of short-term export credit insurance: the framework introduces additional flexibility on how to demonstrate that certain countries present uninsurable risks in the private market, thus allowing the state to provide, when necessary, short-term export credit insurance.

Tourism operators in the Danube Delta have requested in writing from both the Government and the Presidency: The implementation of national programs, circumscribed to European ones, which take into account the following specific coordinates:

1. Exemption from paying taxes and duties for the hospitality industry in deltaic and seaside tourism, at least until the end of 2020.

2. The Government of Romania to intensify negotiations with the European Union for the allocation of funding sources for tourism for: – modernization of accommodation spaces in deltaic and seaside tourism, – development of support services to increase competitiveness, including human resources maintained for this purpose, as well as for the expenses necessary for the resumption of tourism activity; – acquisition and modernization of water transport capabilities. In this regard, we request the Ministry of European Funds to accelerate to the maximum the procedure for writing the guides for the new funding sources that the Romanian Government will have to obtain, insisting on the simplification of the procedures for accessing these funds.

3. Extension of the regulatory scope of technical unemployment for all employees in the hospitality industry whose employment contracts have been terminated or suspended as a result of the declaration of the state of emergency.

4. Modification or completion of Art. XI para. (1) of G.E.O. no. 30/2020 of March 18, 2020, for the modification and completion of some normative acts, as well as for establishing measures in the field of social protection in the context of the epidemiological situation determined by the spread of the COVID-19 coronavirus, in the sense of extending the period for which technical unemployment indemnities are granted, of 75% of the basic salary corresponding to the job held, which employees benefit from the unemployment insurance budget for at least 60 days after the cessation of the state of emergency, established by Decree no. 195/2020 regarding the establishment of the state of emergency on the territory of Romania, as well as during the off-season period (November – December 2020; January – March 2021), as tourism will effectively resume only after the cessation of the pandemic and the lifting of all restrictions, with a decrease of approximately 80% of the turnover possible for the few remaining months of operation in the season;

5. Extension of the term for granting loans with subsidized interest until at least September 31, 2021, because the term regulated by Art. 1 point 2 para. (3^3) of G.E.O. no. 29/2020 regarding some economic and fiscal-budgetary measures, of March 31, 2021, does not take into account the seasonal nature of the Danube Delta area and the Black Sea coast. II.

In conclusion, we request the flexibility of economic measures in relation to the seasonal nature of tourism activity in the Danube Delta and the Black Sea coast, by adopting a special regulation that ensures the continuity of tourism in this area of national interest.

The Danube Delta Tourism Destination Management Association was joined by: The Danube Delta Tourism Employers’ Association through President Daniel Ilusca; The Federation of Fish Producers’ Organizations in the Danube Delta through President Dan Verbina; The Golovita Jurilovca Fishermen’s Association through President Catalin Balaban; The Danube Delta Motor Boat Club Association through President Marian Filimon; Dragos Simion – representative of the transporters; The Mamaia – Constanta Employers’ Organization through President Nicolae Bucovala; The Eforie Employers’ Organization through President Georgeta Cozma; The Ion Movila Eforie – Techirghiol Patronage through President Iuliana Tasie; The Mangalia Employers’ Organization through President Linica Stan; The Mangalia and Resorts Tourism Destination Management Organization through President Dumitru Filip.