A lockdown is a real problem for industries like hospitality. She endured it for many months: without trade fairs and congresses, with few guests and high losses. And there is still no recovery in sight, on the contrary. The tourism industry should therefore benefit like no other branch of the economy from the so-called bridging aid III Plus, which the federal government recently extended until the end of March 2022. It is all the more surprising when one of the larger hotel entrepreneurs in Germany says: “Then I’d rather a lockdown. Because I can’t get any more help.”
We are talking about Dirk Iserlohe, 57, Chairman of the Supervisory Board of the Dorint Group with 62 hotels in German-speaking countries. “If you decide on a lockdown now,” says the head of the Dorint parent company Honestis, “then politicians would at least be ethically and morally forced to do something similar to the first and second lockdowns.” Iserlohe is referring to the billions in government aid for companies that have had to close temporarily.
Iserlohe admits: “I wanted to provoke, I wanted to attract attention with the demand.” Because who wants a lockdown? But behind the bold message hides serious criticism of the system of state bridging and fixed cost aid. “I don’t want to be discriminated against,” complains Iserlohe. “And neither do many of my colleagues.”
His dilemma: hoteliers can and were able to get reimbursement of expenses for rents or leases, electricity and insurance as part of bridging aid III and III Plus – however, the support is capped at a total of 52 million euros per company. The federal government refers here to the upper limits under state aid law, which are prescribed by European law. Up to 52 million euros can be of great help to hoteliers who run one or a few hotels. But Iserlohe says: “We are already at the limit of all compensation options.”
It is similar to other larger hotel chains. Marcus Bernhardt, head of the Deutsche Hospitality hotel group with 122 hotels and brands such as Steigenberger, says he is grateful for the support his industry has received from the federal government in recent months. Because of the cap on federal funds, only a small part of the losses of the larger employers in the hotel industry in Germany will be absorbed. “We see an urgent need for improvement here – also in view of the developments that are now emerging for the coming months,” said Bernhardt.
The industry association says that the desire for a lockdown is not a majority opinion
Ingrid Hartges, general manager of the Dehoga Federal Association, can understand Iserlohe’s criticism. “It must be ensured that all companies that are now again experiencing massive restrictions or are being closed receive sufficient help,” says Hartges. The larger hotel chains are unlikely to fall through the cracks either. “You mainly operate city and conference hotels, which since reopening at the beginning of June, due to the considerable losses in the event business and the resulting lack of overnight stays by business travelers, have recorded a decline in sales of more than 30 percent.”
Iserlohe’s desire for a lockdown is probably an expression of growing despair. “For the industry as a whole, the following applies: people want to work, companies want to stay open and, in particular, keep employees. 2 G is definitely better than a lockdown,” says the Dehoga managing director. But politicians must also create the conditions for the vaccination campaign to finally run better and for sufficient test capacities to be available.
Dorint’s cry for emergency marks a change in mood in the industry. Until a few weeks ago, Iserlohe sounded very different: “We haven’t lost any money since August,” says Iserlohe. Many private individuals have discovered – for better or worse – holidays in Germany, business trips have recovered. “We were able to achieve sensational sales up to October.” But the record values for new corona infections have suddenly slowed this development. The average occupancy rate at Dorint is now falling from around 60 percent to 35 or 40, fears the chairman of the supervisory board. “And it will get worse in December.”
His pessimistic assessment coincides with the results of a current survey by the hotel and restaurant association. Around nine out of ten companies report canceled Christmas parties. Almost every second celebration has already been canceled. There are also cancellations in the event and conference area. And things are not looking good when it comes to hotel accommodation either. 80 percent of the accommodation providers complain about corona-related cancellations by both business travelers and tourists.
Iserlohe calculates that Dorint has received a total of 77 million euros from the state during the Corona crisis. “That’s a lot of money, yes.” But he puts the pandemic-related losses so far at 140 million euros. “I stay on the half,” stated Iserlohe. If, on the other hand, someone “only” operates four or five hotels, they can have almost the entire damage reimbursed. “That actually contradicts the philosophy in the German state,” complains the entrepreneur. The state is thus distorting competition in the hotel market.
Iserlohe is therefore already demanding a “competition distortion compensation fund” from the federal government: Each company affected should report how much it lacks up to 95 percent compensation. “And the rest is paid out,” Iserlohe imagines, “in order to equate all companies in a branch.” For the hotel chains, this compensation would cost around 600 million euros, Iserlohe estimates.