Catering sector renews plea for help as winter approaches
The Gibraltar Catering Association said it feels the hospitality industry’s specific difficulties are not being understood, adding that the next three months will be critical for the sector’s survival.
Restaurateurs are struggling with a 50% reduction in capacity, reduced opening hours and continued high fixed costs.
The GCA said the Government had “displayed little understanding of the problems facing the hospitality industry” in its last week response to the GCA concerns.
“The Association acknowledges that were it not for Beat Assistance received from Government during Q2 and Q3, many of us would not have survived the lockdown,” the GCA said in a statement.
“Nevertheless, many members have had to dig deep into our pockets in an attempt to keep their businesses afloat. Some, facing the dire consequence of closure.”
“The reality moving into Q4, is that for those businesses renting in the private sector at pre-Covid rates whose business models rely heavily on tourism footfall, a vibrant nightlife and private functions, the financial assistance package announced by Government for Q4 falls short of their requirements and will almost certainly drive them off the cliff edge.”
The GCA said it is its duty to protect these entities and lobby to avoid widespread closures and redundancies.
The GCA said it should “not entertain the discussion of where tax-payers’ money is most efficiently spent”.
It added: “We are extremely mindful of the use of tax-payers’ money, we too are tax-payers, our employees are tax payers. Collectively, we are a huge source of employment and a mayor tax contributor to our local economy.”
“Hospitality industry employees are on a rate of pay not much higher than the minimum wage, yet they pay the same amount of social insurance as the highest paid government workers as well as top earners in the gaming industry and financial sector.”
“As employers, we pay the same rate of employers’ social insurance contributions per employee as the highest earning companies on the Rock.”
“We have received an overwhelming amount of public support towards our industry, for which we are grateful.”
“Without our valued loyal customers, we would not have been able to survive these last four months.”
“The Government’s response that we are acting under a ‘sense of entitlement’ is simply an attempt to turn public opinion against us in our time of crisis.”
“Restaurants are been forced to turn away bookings simply due to enforced reduced capacity restrictions.”
“As explained in previous meetings with Government, sales are down by an average of 60% during the so called ‘good months’ whilst costs are not.”
“Therefore, the next three months will be critical for the survival of our industry.”
Restaurants and bars are faced with restrictions of 50% of capacity, with a maximum of 10 diners being allowed to sit on a table.
In addition, businesses were asked to reduce their opening hours from 2am to 1am in line with Covid-19 regulations.
“We have had restrictions and closures imposed on us with minimal notice and without any consultation,” the GCA said.
“We have had to adapt every step of the way to these new restrictions, but we need further help.”
“We have continuously reached out to all relevant stakeholders to plead with them and yet the restrictions continue to increase.”
“We are the only industry in Gibraltar to have these restrictions placed upon us and are the first sector to take the brunt of new rules and regulations with no prior consultation.”
But soon the outside terraces will be out of use during the autumn and winter months.
Coupled by low public confidence as a result of being discouraged from social gatherings, the sector predicts this will be its worst trading period.
“We have been told by Government that restaurants continue to attract good business to their establishments,” the GCA said.
“This a completely untrue and the Government needs to realise that if a particular restaurant appears to be full, we are in actual fact half empty.”
“As clearly stated in our permit to operate our restaurant, cafeteria or bar issued by the Environmental Agency.”
“We are restricted to 50% of our original capacity basis with no ability to host normal standing functions which are vital to many venues.”
“Restaurants are already facing a huge number of cancellations over the Christmas period due to these restrictions and we need to remember it is not just bars and restaurants feeling the pinch, this affects suppliers and their employees too.”
High rents from private landlords is a further concern for the GCA.
“The Government continues to award 50% discount to their tenants and request private landlords give 25% to theirs, whilst only able to operate at 50% capacity,” it said.
“This disparity is alarming. If the Government are giving 50% to their own tenants, which is welcomed, the GCA feels that the equitable thing would be for Government to find a mechanism in which to make up the 25% differential between its own Government tenants and businesses in the private sector.”
“The current situation creates an unlevel playing field in which businesses renting from Government -these are mainly Restaurants as very few retail shops if any have Government as landlords - enjoy more favourable conditions and thus are placed at a more advantageous position vis a vis private landlord rentals who on the whole pay much higher rents anyway.”
“The same discrepancies also affects discounts on outside terrace areas, a recommended 50% at the discretion of private landlord versus 100% straight discount for government tenants.”
On a suggested “eat out to help out” scheme and on Government backed 80% loans, the GCA said an outline proposal has been submitted which Government have expressed support for but wish to have the method changed.
It said it is working with a partner to arrange this amendment and waiting for Government to reply with a convenient meeting date.
“The Loan Scheme has been offered as a ‘life line’ to get businesses into debt when we have no way of repaying that debt without knowing when restrictions will change and the unknown effects of Brexit coming at the turn of the year,” the GCA said.
“To force suffering businesses into debt is disastrous.”
“This loan is not for business improvement - which is what a loan should be for, instead it is to bail out business affected by enforced restrictions and which show no sign of easing.”
The GCA said that far from criticising the Government, it is “simply advising Government of our concerns and know that these announced Q4 measures will not save a large number of business in hospitality.”
“We too are doing all we can to support our economy, however this cannot be done if our businesses are forced to close,” the GCA said.
“We would urge Government to hold urgent and meaningful discussions with the Association with a view to ensuring the survival of our industry.”
“We do not want handouts, but the realisation that without our sector surviving this crisis, the long-term effects could be disastrous for Gibraltar as a whole.”