“Hospitality at crossroads”, “Measures fall short”

paceville coronavirus
Miguela Xuereb

Both the Malta Employers’ Association and the Malta Hotels and Restaurants Association have reacted to the financial package announced by the government saying that the measures fall short to properly address the economic crisis sparked by the novel coronavirus.

Bleak future for the tourism sector

The MHRA pointed out that operators in the tourism sector are now faced with having to carry the payroll cost every single day without any income being generated for an indefinite period of time. This can only be sustained for a small number of weeksbut this period can be extended substantially with better government assistant and some help from employees, the association said.

“Without both of these the ability to stay operational is very limited.”

Reacting to the measures, MHRA said it was surprised and disappointed, highlighting that the most stakeholders in the sector will be unable to retain their fulltime employees and remain open.

“The future for the tourism sector in Malta is at the moment bleak as a full recovery from this crises is unlikely to happen in the next weeks to come and it can take months before some form of business returns.  A contribution of 320 euro per employee per month towards the payroll costs is a far cry from what was expected to help. Some operators will find themselves in dire economic state,” the statement reads.

The MHRA welcomed proposals related to unsecured loans, however, each operator will have to calculate how these will assist their businesses, hoping that the whole package of measures would give them some breathing space.

Further the MHRA expressed its disappointment at the measures announced saying that they fell short from addressing the business needs at present.

“Without support of payroll costs, by a minimum of €800 per month per employee, the situation will effectively turn very difficult, very quickly.”

“A PR exercise” – MEA

The Malta Employers’ Association said that while from a public relations perspective the measures sounded impressive, in practice they fell short in addressing the hardship faced by the business community in the current circumstances. The association warned that the incentives will fail to curb the mass redundancies.

The MEA pointed out that most of the measures consisted of deferment rather than cancellation, referring to measures related to social security payments, VAT and loan guarantees.

“The impetus should have been more on wage subsidisation, rather than liquidity. This would have been more effective to protect jobs in the private sector,” the MEA said noting that it had submitted its proposals to address the situation.

“The package does have positive aspects, such as the assistance which is also extended to the self employed, and the incentives parents who cannot telework.”

Reacting to the €350 quarantine leave grant, the MEA said that the employers in principle are against the imposition that they have to pay for such leave.

“Quarantine leave is a social service, and social services are financed by taxes, not by employers,” MEA said, adding that it would continue to strongly oppose the amendments to the legal notice both because of its contents and also because of the manner in which it was introduced.

The MEA said that it hoped that other measures would be introduced in the near future, remarking that while the measures were a step in the right direction, they fell short of covering the full scale of potential problems that are being envisaged by many businesses.