A domestic COVID-19 outbreak is wreaking havoc on the hospitality industry this quarter, and hotels are pressing for a quick bailout rather than the midterm stimulus measures the government has proposed for September.
FDC International Hotels Corp (FDC, 雲品國際) chairman Emile Sheng (盛治仁) told shareholders last week that the group might post a 30 percent slump in revenue this quarter as people cancel room reservations and shun dinning out.
“About 50 percent of consumers are willing to live with the virus, but few sectors can emerge unscathed from business losses of up to 50 percent,” Sheng said, adding that FDC would post poor financial results this quarter.
Photo: CNA
About 60 percent of tour groups canceled or postponed room reservations in the past two months, while 70 percent of independent guests pressed ahead with travel plans, Sheng said.
This has driven the hospitality industry into financial distress for which relief funds, such as wage subsidies, would be more helpful, he said.
The Cabinet last week announced it would set aside NT$5.5 billion (US$188.72 million) to shore up the tourism sector in September and November.
The Italian government has provided hotel employees with subsidies equal to the minimum wage since last year so that they could maintain a decent living, Sheng said, adding that the domestic industry would remain difficult next month with poor visibility beyond.
Luxury hotel operator My Humble House Hospitality Management Consulting Co (寒舍餐旅) said that its food and beverage sales dropped 50 percent in the past two months and the group has been relying on food takeout services to make do.
Takeout services that feature affordable boxed meals picked up 30 percent, My Humble House chairman Wilhelm Tsai (蔡伯翰) told a shareholders’ meeting yesterday.
The hospitality industry has been taking a hard hit from the COVID-19 pandemic for three straight years, and the company has no choice but to survive by focusing on domestic tourism and food takeout services, Tsai said.
Shareholders yesterday agreed to reduce the company’s capital by NT$200 million to write off losses, and gave the go-ahead to a capital increase plan through private placements to strengthen the company’s capital structure.
Tsai and Sheng voiced concerns the industry is likely to suffer talent and labor shortages once the virus outbreak stabilizes.
Many workers have switched to other sectors in pursuit of stable and better pay for the past two years, they said.
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