Hoteliers barely able to keep their heads above water

Ljubljana – The head of the Slovenian Hoteliers’ Association, Gregor Jamnik, has described the situation in the industry as disastrous, warning that the bulk of businesses are not generating any revenue and even though most are still able to keep their heads above water, they will need long-term state aid as the industry will not fully recover in a decade.

“I cannot express how awful the situation,” Jamnik, director of Hotel Slon in Ljubljana, has told the STA. “We’re one hundred percent dependent on state aid. We’re not generating any cash flow or revenue.”

He noted that the state was refunding only part of fixed costs, but that those who had used up all their cash during the long-running crisis “cannot even be helped by the state”.

Ljubljana hoteliers are still coping, having awaited the Covid-19 crisis in quite good shape financially. However, in some other parts of the country, for example in Maribor, hotels are said to be closing down and are being repossessed by creditor banks.

At any rate, hoteliers are on artificial life support “We don’t know what will happen when state aid ends, we fear that,” said Jamnik, who expects the road to recovery to be very long.

It will take at least five years for tourism to recover, or even ten years in case of cross-Atlantic travel and conference tourism. “The figures we saw in 2019 are unlikely to be seen again this decade.”

Still new hotels are being built in Ljubljana, which means even more beds and consequently further pressure on prices; Jamnik warned of the danger of a price war such as Ljubljana had seen out of season already before the pandemic.

The outlook for the summer is uncertain. While coastal regions report good bookings and people can hardly wait to travel, restrictions are expected to persist and PCR tests are expected to be required, which would make holidays even more expensive.

Another problem is the slow vaccination rollout, not only in Slovenia, but also elsewhere.

“People will head out if they feel safe and if they don’t have to pay hefty sums for PCR tests. There’s considerable risk that this year’s season will be even worse than last year’s, which was bad anyway.”

Jamnik regrets that the government would not allow tourism and “doesn’t understand hoteliers aren’t a source of infections”. Only business people, diplomats, athletes and people getting treatment are allowed to stay in hotels at the moment.

As an example that Slovenia could follow Jamnik offered Croatia where tourism has been allowed and hotels at seaside destinations weathered the winter well being full with local guests every weekend.

He hopes the government will allow tourism to reopen as soon as possible, so that tourism vouchers could be spent and at least May Day holidays could be rescued.

Similar demands have come from the trade union of hospitality and tourism workers, which urged Milan Krek, the head of the National Institute of Public Health, to provide arguments and data showing why the sector is an infection risk.