KHN responds to CBS figures: ‘turnover drop in catering industry is unprecedented’

The KHN statement is as follows:

In the first quarter, the turnover of the branch already fell by almost 14 percent. Due to the mandatory temporary closure of food and beverage outlets and the declining demand for overnight stays and (business) events, the catering industry’s turnover decreased significantly, especially in April. Statistics Netherlands reports that the catering industry generated 57 percent less turnover in the first and second quarter of 2020 than in the same period in 2019. For example, turnover from hotels fell by 80 percent, from restaurants by 58 percent and from fast service by 29 percent. Koninklijke Horeca Nederland (KHN) has already seen that the reopening of food and beverage outlets is a loss-making situation for many entrepreneurs. Moreover, the event industry is hit hard; conferences, catering and events hardly generate any turnover and there is still no prospect for clubs & nightlife. It is also striking that the Amsterdam region is being hit extra by a decline in international tourism and less to no business spending due to the sharp decline in events and conferences.

‘Additional support and more targeted support necessary’
A recent representative survey by KHN among all its members shows that despite the nice weather in July and August, the average turnover forecast over these two months is 63 percent of the turnover that was normally achieved in the same period. For the full year, they expect total sales of 57 percent of “normal”. KHN members expect that the summer revival will decline in the fall and winter, also because entrepreneurs will then be more dependent on ‘indoors’.

Here, too, it is striking that during the summer months Amsterdam experienced a slower recovery compared to the national average and the expectation is that for the rest of 2020 the total turnover there will remain at 45 percent. For hotels in the capital, turnover is expected to remain at 30 percent. Nationally, the turnover for hotels is 64 percent during the summer months and 57 percent the rest of the year. Government support through aid package 3 is therefore necessary. KHN understands that the cabinet will evaluate the support packages at a time, including the amount of support that ensues from them. However, the hospitality industry is affected twice by the NOW-3 scheme. The last six months of 2020 saw a sharp drop in turnover, no long holiday period, bad weather, no outdoor options and now also the phasing out of the wage cost compensation in the NOW-3 scheme. It is still the case that the government pays up to 90 percent of the salaries of affected companies that have at least 20 percent loss of turnover. From 1 January 2021, only companies with a 30 percent loss of turnover will be eligible for the NOW. KHN is of the opinion that the NOW should be continued at least until the end of 2020 on the condition of at least 20% loss of turnover and then a maximum of 90% wage cost subsidy. Otherwise, the sector will suffer two “blows” in the coming period, with all the consequences that entails. Moreover, for conferences, catering, events and clubs & nightlife companies, extra targeted support is needed because no longer-term perspective is offered yet.

Aid measures make the difference between “survive” or close
The survey asked catering entrepreneurs to what extent they consider additional support measures necessary. A large majority of catering entrepreneurs find additional support measures important and hope for continuity in their business operations. More than half (51 percent) indicate that they have not yet taken any dismissal measures. Contracts have not been renewed (18 percent) and fewer on-call workers are being deployed (28 percent). The corona virus and the associated measures mean that there are already more than 50,000 fewer jobs in the hospitality industry. Although it is difficult to predict what consequences the development of the corona virus will have in the long term, KHN has asked hospitality entrepreneurs what expectations they currently have for the future of their company. In the coming period, at least 12 percent of catering entrepreneurs expect to have to take redundancy measures to balance turnover and staffing. Thirty percent of entrepreneurs indicate that they will certainly survive the corona crisis under the current circumstances, compared to 23 percent in June. The other 70 percent is certainly not so sure about that. Depending on the developments and subsequent decisions of the cabinet, this sentiment may tilt.

In addition to financial support, other solutions are badly needed
In addition to the financial support from the government, the members see the need for, among other things, a reduction in VAT, the preservation of terraces in the winter and a compensation of the transition allowance from the UWV. Moreover, an exemption from outstanding payments or local charges is a dire necessity.

Relaxation of the 1.5 meter distance standard and enforcement policy
A relaxation of the 1.5 meter distance standard is necessary for catering entrepreneurs to generate income in a responsible manner in the winter and to be able to operate their business on their own (without government infusion). KHN therefore prefers that the 1.5 meter distance standard does not apply to groups up to and including 9 people, so that there is more room for entrepreneurship, both literally and figuratively, possibly with the current health check being maintained in advance. Moreover, it is still impossible to explain that the catering industry is the only sector in which the entrepreneurs are responsible for compliance with the laws and regulations. That is why KHN wants the cabinet to come up with a relaxation of measures concerning enforcement policy.

Local measures
The major consequences for the industry stem from government measures and the restrictions imposed on the hospitality industry. Nevertheless, KHN members are generally positive about the measures that many municipalities have taken and with which they have responded to catering entrepreneurs, such as the suspension or remission of local charges, expansion of terraces and an extension of opening and closing times. Many catering entrepreneurs experience that in daily practice it is not always possible to adhere to the applicable corona nails. For example, the survey shows that KHN members are most “affected” by the limited capacity inside due to the strict 1.5-meter rule, the fixed and compulsory seat and that guests do not comply with the rules. Ten percent of catering entrepreneurs think that enforcement is too strict. About 10 percent has now also been confronted with a warning.

Looking forward
KHN chairman Robèr Willemsen: ‘For KHN, the interests of catering entrepreneurs and the future of the catering industry are paramount. Progress is really necessary to keep the industry afloat. We therefore hope that in the coming period, in close consultation with the cabinet, we can look for solutions to offer catering entrepreneurs perspective and thus literally and figuratively give them more room to do business. ‘
(PvWK, statement is on behalf of the KHN, image: Alexas / Pexels)

About KHN
‘KHN (Koninklijke Horeca Nederland) is the largest catering trade association in our country. With more than 230 departments throughout the Netherlands, we represent more than 20,000 catering entrepreneurs with about 255,000 catering employees. We stand for a professional and future-proof catering industry. We support our members through lobbying, advice and financial member benefits. This is how KHN gives the catering industry power. ‘

(source: KHN)

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