Saturday 08 August 2020

A fifth of cafés and restaurants remain shut: ‘the losses are less’

One cafe that has opened, with protective gear. Credit: DutchNews.nl

A fifth of cafés and restaurants remain shut due to corona restrictions, according to an analysis of payment transactions by the ING Economisch Bureau.

The analysts say that by July, eight in ten businesses were open again compared to just a quarter at the end of March, but that takings are 10% less than normal for this time of year.

The bureau says that revenues are rising, although overall it predicts that hotels, bars, restaurants and cafés will take a hit of 30% to 40% lower revenues than usual in 2020 and does not expect them to recover until the end of 2021.

For many businesses, the costs of opening are simply greater than staying shut and they are wary of taking on huge losses, according to the ING.

Losses

‘The level of government support that businesses get does depend on their income, so this is a factor,’ ING sector economist Thijs Geijer told DutchNews.nl. ‘If they do open, there are costs for more staff, electricity, and bought-in goods that need to match what they sell. For a lot of businesses – like a dance bar – it’s very difficult to see how they could be profitable.’

The research suggests that hospitality businesses in the cities have reopened, but those near schools and offices which are closed have suffered because their normal clients are working and studying at home. Restaurants without terraces are more likely to be closed, the economists say, because rules are looser for outside venues.

Industry association the KHN told the NOS that it is concerned that for some businesses the regulations only look better on paper but not in practice. ‘Many business owners have tried, but come to the conclusion that their losses are less if they keep the doors closed than if they open again,’ a spokesperson said.

Undoubtedly, some businesses will go bust or choose to close, added Geijer. ‘It’s difficult to say how many will shut: the support rules and whether or not the 1.5m rule is relaxed later this year will play a large role.’

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