HOTREC letter to Commissioner Breton

HOTREC letter to Commissioner Breton

Brussels, 17 September 2021

Re: A transition pathway for the hospitality sector

Dear Commissioner Breton,

HOTREC is the umbrella Association of Hotels, Restaurants and Cafés in Europe. Our industry proudly represents 2 million companies, extremely diverse, 99% of them being small and micro-enterprises. Together they are a major employer in Europe (more than 12 million people in 2019) and positively impact other businesses, for local culture and city centres.

The past 18 months have been extraordinarily challenging.  We would like to thank you for the continuous support provided by the European Commission to the hospitality sector throughout the crisis. The fast and successful deployment of the vaccination roll out across Europe; the introduction of the EU COVID-certificate within a very short period of time; and, crucially, the deployment of various EU funding possibilities (e.g. State Aid, Sure mechanism, cohesion policy, Recovery and Resilience facility), have been critical measures in trying to put in place a Marshall Plan for the hospitality and tourism sector to overcome the crisis.  We also very much welcome the support through weekly/bi-weekly meetings with DG GROW/Tourism Unit to discuss the situation of the sector and possible solutions to overcome the crisis.

Despite all these efforts, our hotels, restaurants, cafés, night clubs are still in need of a lifeline. 60% of HOTREC members believe that significant disruptions will last until at least 2023. 23% of them, instead, anticipate a full recovery by 2024 or later.

This spring and summer season brought a wave of cautious optimism to the hospitality industry.  For the first time in over one year and a half, sectoral quarterly growth rates in Q2 2021 were positive across all European markets. In the EU27, a growth rate of 67,9% shows that the sector is regaining its form after five successive quarters in double-digit negatives. However turnover figures remain well below sectoral turnover levels recorded in Q2 before the covid-19 pandemic – with 2021 turnover levels reaching only 55% of the levels recorded in 2019. From 2015 to 2019, Q2 hospitality sector turnover figures consistently increased year-on-year before shrinking almost threefold in 2020.

We look at an ambitious future, more resilient, sustainable, and digital for the hospitality sector. We very much welcome the Commission Staff Working Document on “Scenarios towards co-creation pathway for tourism for a more resilient, innovative and sustainable ecosystem” and the launch of a wide consultation process.

Yet, millions of hospitality businesses are in great need to continued aid with practical and concrete solutions.   We call on the EU to continue its tremendous efforts.  Reopening businesses is not equal to recovery. The lack of international tourists is still a reality, the lack of clients and business since March 2020 cannot be compensated overnight. The liquidity problems coupled with the staffing crisis are prominent challenges.   Short- and medium-term support measures are vital.

In the short term, we call on the EU institutions to maintain support measures, for as long as needed.  We consider that an extension of the State Aid temporary framework would be critical for our sector. We also believe that the EU has a major role to play to help avoid the over indebtedness of creditworthy companies.  In some countries, up to 30% of the businesses are facing risk of bankruptcies. The restructuring of the debt capital via the replacement of short-term loans by long term solutions is the only viable approach to save a vast number of businesses from closure.

We are grateful for your consideration of these immediate challenges.  We are also willing to share with you in the enclosed our views and initial ideas for what a successful sustainable and digital transition means for the hospitality and tourism sector in Europe.

We look forward to continuing engaging with you and the European Commission.

Yours sincerely,

Marie Audren

HOTREC Director General

HOTREC position paper 'A transition pathway for the hospitality sector'