Society

Hospitality industry was left to suffer consequences of Government’s unilateral decision

Summarizing results in the hospitality industry with Aneta Zasavitski, president of the employers association “National Association of Restaurants and Leisure Facilities of the Republic of Moldova” (MĂR), within IPN’s series “2020 in Review: Good and Bad Aspects”.

Aneta Zasavitski said 2020 was a year of survival and modeling of new human behaviors. Also in 2020, the priorities were reset, the business models were modified and adjustment to a new reality with unknown consequences in the short and long terms took place. The spread of the COVID-19 infection that continuously and aggressively affects the health sector has alarming consequences for the economic activities that actually represents a source for financing the health sector and of other public policies intended for the people’s needs.

The pandemic generated an unprecedented slowdown in the activity of public eating places owing to the spring quarantine, social distancing and imposed restrictions. The economic costs of the pandemic are huge. In the course of the year, the hospitality industry was hit the first. On March 16, economic activity was halted fully. In the course of April and May, there were permitted delivery activities, sale from stalls, take-outs. On June 15, servicing activities inside facilities and at terraces were allowed again.

During three months, the hospitality industry, including business entities and their employees, didn’t benefit from financial support if only from the zero rate on the local tax introduced by the Chisinau City Hall. It is an appropriate measure that should be a model for the central authorities in the case of the other taxes and duties. As to the rest, the hospitality industry was left to suffer the consequences of a unilateral decision taken by the Government. Each day was to the detriment of businesses and working people, whose debts grew more.

The resumption of the activity didn’t mean resumption of the activity of the sector from zero, given the heavy debts accumulated owing to the three months of quarantine. On June 15, the facilities resumed work with a series of restrictions – 50% reduction in service provision capacities. According to the State Tax Service, during the first seven months of 2020, the hospitality industry, compared with the same period of 2019, witnessed declines in revenues of up to 70%. From July until now, the hospitality industry’s revenues fell by 50% on last year. The sector lost a substantial part of the market. The effects will persist if the Government does not take measures to support the sector in the medium term. The effects of the halt and restrictions are acutely felt by the employees from the sector, in terms of working hours, salaries, flow of people. The whole sector is in a difficult situation. The interaction with the client here is fundamental as the industry not only sells foods and drinks, but also provides other services, from socialization, atmosphere to events. For many business entities working in the sector, the diminution of turnover is unprecedented and for some this means closure of business.

The state must intervene in this case, but it does not do it in Moldova. One of the lessons for the public sector is that they should reinvent their behavior, should radically modify the approaches, the interactions with the private sector, as other states do it urgently so as to keep the sector competitive. Those from the sector are very dissatisfied with the measures taken in the health sector and in the economy, but realize that there are no available budget funds. That’s why the authorities should at least not hamper them if they cannot help them. The taken decisions should be well-thought out and should be discussed with the sector because public health is in everyone’s interests, regardless of the economic sector, and the employees of the hospitality industry want to work at home.


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