Impact of Coronavirus in Tourism – Case Studies

Calin Ile, President of the Romanian Hotel Industry Federation (FIHR), stated that the pandemic’s impact is dramatic; essentially, the tourism industry is going through a period of total blockage, something never seen or encountered before in history.

He specified that, currently, the entire hotel industry is going through the first phase of the crisis triggered by COVID-19, namely survival. Efforts are being made to find the best methods to reduce costs, either by resorting to solutions offered by the government or by negotiating other contractual conditions with suppliers or employees.

FIHR has invited several tourism organizations to jointly create a manifest called “SOS Romanian Tourism,” a project that should show by the end of April what needs to be done in tourism for the sector to stay alive. All invited organizations accepted, so we have already started the project; we are divided into 10 working groups with about 50 specialists involved in this ambitious but very necessary process.

The project is, however, a public one; anyone who believes they have a good idea to help tourism in the short, medium, and long term can contribute on the “open ideas box” platform opened on the FIHR website.

To complete the form CLICK HERE

Calin Ile listed several solutions that would help tourism get through this period.

I. The first measure would be supporting tourism employees. The adopted form of technical unemployment would be useful if it did not include the obligation to maintain employees for a period similar to the one in which they benefited from technical unemployment. But even so, it is a good one, though not sufficient. To this should be added a measure providing for “partial work” for tourism employees. That is, if the hotel needs only 50% of the employees after reopening, for example, it hires them all with a reduced working time of only 4 hours and the state pays the difference. This allows everyone to be re-hired and allows for reconstruction. Of course, employees will also consent to this effort, with Poland having an interesting and possible example to follow. That is, the employee gives up 20%, and the difference is divided between the employer (40%) and the state (40%). In this way, each party contributed something to saving the situation of the workforce LEGALLY employed in tourism.

II. The second measure would be supporting the liquidity of tourism operators so affected by the crisis:

• cancellation of certain taxes (the specific tax related to the crisis period, copyright fees, property tax)

• deferral of certain taxes – which has been done by the government (partially) for 3 months

• negotiation of obligations such as bank installments, utilities

• working capital and investment loans with subsidized interest rates

• grants for certain operators based on taxes paid to the state in recent years

III. The third measure would be post-crisis preparation:

• measures to stimulate domestic demand through holiday vouchers and meal tickets

• not touching the fiscal framework for a period of time to allow operators room and time to recover

• promotion campaign supported by the state – both domestically and abroad (especially Europe and neighboring countries)

• administrative measures for simplification, debureaucratization, labor flexibility, and digitalization in tourism

• public investments in the entire economy and implicitly in tourism

• emphasizing safety and hygiene in our hotels by modifying the classification standard

TurismMarket has produced a series of articles discussing the impact of the COVID-19 pandemic on the Romanian tourism industry.