Hoteliers seek govt. support to subsidise employee salaries

• Want govt. help to pay salaries of employees earning below Rs.40, 000
• Labour costs amount to 70% of industry overheads

By Nishel Fernando 
Sri Lanka’s crisis-hit hospitality sector seeks government support to subsidise the salaries of employees who are earning below Rs.40, 000 as their cash reserves have started to dry up with zero revenue as coronavirus (COVID-19) pandemic has paralysed the global travel industry. 

“The bigger chains are better positioned to continue paying salaries for their employees for next 2-3 months despite nil revenue. However, some smaller firms are even struggling to pay April salaries to their employees, as they don’t have sufficient cash reserves. There will be a time all will run out of cash. 

Along with working capital loans, a wage subsidy will be a huge relief for us. That will allow us to stretch the period that we can be around for,” Hemas Holdings PLC Group Director Abbas Esufally told Mirror Business.  

The labour costs in particular remain the main challenge for hoteliers to remain afloat during this period with no revenue being generated. With other cost components being trimmed to record low levels, Esufally noted that labour costs amount to 70 percent of the industry’s overhead at the moment. 

Therefore, the hoteliers appeal to the government to provide 100 percent wage subsidy for employees earning below Rs.40,000, who are considered as blue-collar workers. 

The vast majority of hotels in the country remain closed to trim their costs while retaining only basic staff responsible for maintenance, security and engineering works. In Colombo, except for four hotels, all the other hotels have been closed down. 

“Most hotels have not terminated their employees. They have been asked to go home and they are being paid as long as possible,” Esufally added.

Apparel and tourism are the hardest-hit industries in the country due to COVID-19. 

Moving forward, Esufally opined that the hotels would have to embrace a new operating model post-COVID-19 addressing health concerns and implementing measures such as social distancing requirements.

He expects that hoteliers are likely to not allow large social gatherings such as weddings at hotels until an effective vaccination is tested and made available commercially.
 

Esufally noted that Hemas and other leading hotel operators are currently working on health and safety protocols to be implemented when the virus comes under control in the country. 

He emphasised that Hemas Group utilising the resources of its healthcare arm will be better prepared for this task. 
“We are reaching out to our healthcare professionals to do awareness creation, training, safety precautions to all our staff. Therefore, our people will be better informed, better trained and better equipped to safeguard not only themselves, but our guests as well,” he said.

Furthermore, The Hotels Association of Sri Lanka (THASL) has already published general guidelines to be followed and it is also currently developinga set of detailed guidelines to be followed.

Esufally revealed that Hemas Group has already commenced online training for its staff to be better prepare for a possible re-opening of their hotel properties in the near future. 

Speaking of the future outlook of the sector, Esufally stressed that measures to curb the spread of the virus would be the initial step for the recovery, however, he noted that full recovery of the sector would take more than one year.  

“A lot will depend on how Sri Lanka succeeds in limiting the virus here to a manageable level and how fast a vaccine will come out globally, then we can start confidence building measures,” he added. 

In the short-term, he professed that Sri Lanka would have to focus more on key tourism source markets in Asia, as job losses and income in Western economies would discourage many people to cancel or delay their travel plans.
“We could begin to see a slight improvement in the industry towards July-August. Tourists from China, Taiwan, Japan and South Korea will start travelling sooner than later. We can attract them, so we can have some cash flows.

In the past, Sri Lanka’s tourism industry was largely dependent on Europe, in particular for the winter season. This year, however, I think we have to look towards the East to get business. Although, Europe would show a huge spike in recovery, their economies have been devastated; many people have lost jobs. Therefore, the people won’t have sufficient disposable income to go on vacations when things start to stabilise there. We hope that we will see more significant arrivals by this December,” he elaborated. 

Nearly 70 persons quarantined at Club Hotel Dolphin

Club Hotel Dolphin in Negombo, which was offered by Hemas Holdings PLC to be used as a quarantine centre, has received nearly 70 persons to be quarantined since last month. 

Hemas offered its 154-room Club Hotel Dolphin located in Waikkal, Negombo to be utilised as a quarantine centre at zero charge, in particular for Sri Lankans returning from Italy.

Speaking to Mirror Business, Hemas Holdings PLC Group Director Abbas Esufally noted that the 148-room property has been offered for quarantine purposes. 

“As a responsible corporate citizen, we offered this hotel because it is in the heart of the area and many people returned from Italy. The hotel currently operates under the Army. 

“We didn’t compel staff to come in, instead we asked them to volunteer and we had so many staff members who volunteered to come and work during this period,” he said.

He revealed that two large batches of people have already left the property after completing the quarantine period and continuously being tested negative for COVID-19. 

“We are now using this property mainly as a quarantine centre for doctors, nurses and other healthcare workers who get exposed as suspected COVID-19 patients,” Esufally said.

The employees of the hotel are currently running kitchen, maintenance and engineering works avoiding direct contact with healthcare workers while the military is delivering food and other supplies to these people. 

Esufally emphasised that fumigation and other precautions are thoroughly followed with the guidance of healthcare professionals once each COVID-19 suspect leaves the hotel premises. 

Further, he noted that the hotel would be refurbished, rebranded and fumigated, once the property is handed back to the management.

In addition to Club Hotel Dolphin, the 150-room Citrus Waskaduwa and 81-room Cinnamon Blue were also offered as quarantine centres by their respective owners.

If the need arises, Esufally said Hemas and the industry would be open to offer more hotels as quarantined centres. 

“If the government wants more from our industry or from Hemas Group, we will be the first to stand up and put our hands up,” he added.