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ECONOMY | 29-05-2021 11:01

11,800 restaurants and hotels have closed in Argentina during pandemic

FEHGRA chamber group says 3,800 establishments have shut their doors already this year, following 8,000 closures in 2020. Approximately 175,000 jobs have been lost in the process.

Almost 12,000 restaurants and hotels have gone under nationwide since the coronavirus pandemic began, causing the worst crisis and the lowest levels of activity in four decades, a report issued by the sector’s chamber FEHGRA (Federación Empresaria Hotelera Gastronómica de la República Argentina) said on Thursday.

"Our reality today is worse than the most pessimistic scenario we had projected. This year we have already lost 3,800 more companies on top of the 8,000 establishments which closed their doors in 2020 while 175,000 jobs have been lost in our sector,” said FEHGRA president Graciela Fresno.

“Now, with the new restrictions preventing most of our small and medium-sized companies (pymes) from working, an already critical situation will worsen further yet. No company denied the possibility to work can hold out," he added.

On Wednesday the government expanded the credit lines at zero interest for pymes and the self-employed in the tourist sector by two billion pesos. Meanwhile, City Hall has exempted restaurants from paying tax on their gross earnings between this month and July. 

Fresno thanked the national government for its support via the Repro II programme to pay wages plus a specific credit line for the sector but assured that "our situation is extremely grave, of historic magnitude and very much worse than the rest of the economy. We need support in line with the dimension of the losses."

She therefore requested assistance equivalent to two minimum wages to pay sector workers and greater access to that benefit for every hotel and restaurant. Repro II aids just over 45,000 workers in this area while last year’s ATP wage supplement reached more than 180,000 hotel and restaurant employees, she pointed out.

The FEHGRA president also supported the bill declaring a state of emergency for the sector, as well as calling for a Federal Reconstruction Plan contemplating a package of economic, tax and labour law measures, as well as incentives and promotion.

According to the FEHGRA report, hotel occupancy last March was halved from two Marches ago while at the same time foreign tourism (a category on which half this City’s hotel activity and a quarter of Patagonian depend) continues to be almost non-existent – 88 percent down from the previous March and 95 percent down compared to March, 2019.

The data of the first quarter of 2021 shows the sector to be operating 41 percent below the levels of the first three months of 2019 (down 50 percent for hotels and 39 percent for restaurants).

As registered by AFIP tax bureau data, the economy as a whole was 6.4 percent down last January from the start of 2020 but the plunge reaches 14 percent for hotels and restaurants.

As for registered employment, the fall last February was 2.6 percent for the economy as a whole but 21.4 percent for hotels and restaurants (or 60,000 less jobs in a month), making it the sector with the worst job destruction.

Last year the sector of accommodation plunged 68 percent by comparison with 2019 while catering fell 44 percent, according to the data from the INDEC national statistics bureau. The same data show other sectors suffering far less – construction (minus 23 percent), manufacturing industry (minus 8 percent), agriculture (minus 7 percent) and commerce (minus 5 percent).



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