Hospitality sector ready for reopening but not without challenges

The hospitality sector is ready, armed with a comprehensive policy, including training workshops and mandatory health and safety protocols, to reopen for business on Monday.

The sector, which includes restaurants, bars and hotels, is the largest arm of the services industry, employing an estimated 137,000 people. “And that’s just direct employment, not even the informal sector,” chairman of the TT Beverage Alcohol Alliance Dr Patrick Antoine noted in an interview with Newsday on Friday. It was not farfetched, then, he added that it would have felt the biggest economic blow from the covid19 lockdowns.

“Because of sheer size and role in economy, the closure would have been severe in all but a few instances,” he said.

Since March 17 all bars and restaurants were closed as the government implemented strict policies to mitigate the spread of the novel coronavirus. Hotels were allowed to remain open, but when the borders closed about a week after, restaurants and bars, occupancy rates plummeted.

Supermarkets, as an essential service, were also allowed to remain open to sell alcoholic beverages, Antoine noted but that’s just a small percentage of sales. The association estimates sales were 40 per cent down in volume in the beverage sector and at least 20,000 workers had to be sent home, even if temporarily, during lockdown.

Manufacturing, which reopened to full strength about a month ago, would have only brought back in about 3,000 people. The largest proportion of workers in the sector would have been people working in bars and restaurants. And even when businesses reopen, it is likely to still be disproportionate.

“For every bar that operates there’s an average of two to four people working in each of those establishments so there has been a large impact on employment and social transfers.” Economic activity in terms of consumer demand will be just as drastically affected in terms of consumer confidence because people don’t know when the threat of the virus might end, even as the sector reopens.

Brian Frontin, CEO of the Trinidad Restaurant, Hotels and Tourism Association, noted that restaurants had to adapt to the no-dining-in policy quickly, with curbside pick-up, take-out and food apps partnerships. And for all of April, there was a complete ban on all operations.

“Restaurants operate primarily on a volume basis because of low profit margins. They need to turn over real estate multiple times a day to service bills, including salaries, rent and utilities. Even the most popular restaurants aren’t the owner of their space, so even if they get rent relief, they will still have to pay utilities and salaries."

Temporary layoff is one of the largest issues, he said, because the industry is reopening in an environment where there is curtailed income and people are jobless. More importantly, people’s preferences have changed materially, shifting to a concern for safety.

“We are seeing at least 25 to 40 per cent of the workforce that will remain in a temporary layoff status in the next three to six months as the industry gauges demand.”

Some establishments will close, he said, and many are doing survival math to decide if staying open is worth it. “How does a 5,000-square-foot restaurant survive on curbside only, especially with high degree of competition?” Food apps, for example, highlight a change in the convenience model and culture where a customer now knows he or she does not have to leave home for a nice meal.

“It’s an adaptive model versus temporary (displacement), so you can appreciate the concern for the way forward.”

What’s needed is a social partnership with all the parties involved, Antoine suggested, including government, workers and business, to make the transition a little less uncertain and share the burden of the industry. Both Antoine and Frontin applauded the Ministry of Health for the proactive interest it showed for listening to the industry when framing the protocols for reopening.

The industry will also be hosting training – online – for workers to understand how to deal with the situation and with customers who might have questions.

“It’s a ready-for-you promise to the people that will send the signal that businesses have gone through a transformation regarding health.

"Operators need to understand what are the new requirements to reopening in a covid19 world – there’s no post-covid,” Frontin said.

(Read more on the sector’s challenges Thursday in this week’s Business Day)