Around 40% of Portugal’s hospitality firms and 18% of hoteliers are ready to “file for insolvency”, according to the country’s national catering national association, AHRESP.
Around 38% of the country’s restaurants are considering insolvency from July because they simply cannot cope with expenses like paying staff wages, suppliers, energy bills, etc as a result of the Covid-19 crisis. Businesses that took part in AHRESP’s survey, admitted that June’s income was drastically reduced compared to previous years. More than 24% suffered losses of over 40%, with 22% reporting up to 60% losses, and 12% admitting that business was down by more than 90%.
Although the country’s furlough scheme “has helped massively to date, more than 54% of businesses say they won’t be able to pay salaries at the end of this month without it”, confirmed AHRESP. In fact, over 17% of companies haven’t managed to pay June salaries yet, with 15% saying they have only part-paid them.
In addition, more than 70% of hospitality firms doubt they will be able to afford to keep all their staff employed until the end of the year. The situation is very similar with regard to hoteliers. “Around 24% remained closed until the end of June. Of those that have opened, 47% said they have had no guests whatsoever, and 41% have indicated occupation rates of up to 25% only.
The industry doubts that things will pick up much during this ‘high’ tourism season between July and September. In fact, around 46% of hoteliers don’t expect occupancy levels to be more than 25%, while only 17% forecast occupancy rates of between 25-50%, noted AHRESP. As a result, 18% of hospitality/hotelier firms are pondering insolvency if they cannot afford to maintain expenses, with 45% still undecided. Of course, the situation could change radically from mid-July, once the tourism season kicks in. It’s a question of having a “wait and see approach to see if tourism will save the day”, concluded AHRESP.