INDUSTRY REELS AS RESTRICTIONS ROLL ON

The hotel industry has reacted swiftly to yesterday’s announcement that Victoria’s COVID-19 restrictions have been extended in a plan scheduled until the end of the year, as test results put some question on the cost versus benefit.

The Victorian government’s plan is based in four stages slated for the next four months, classifying industry restrictions from “closed” to “open with a COVID-Safe plan”, with specific rules under each stage (full details HERE).

Premier Daniel Andrews stressed the need for what he described as a “steady and safe” transition from current stage four measures, relaying that the State’s modelling predicts premature easing could see a third wave by mid-November, meaning “Days, weeks, months of sacrifice, gone”.

Melbourne will continue stage four rules for at least two more weeks, until such time as Victoria records an average daily case rate over two weeks of 30-50.

But the current restrictions on hospitality and retail businesses will remain until at least 26 October – or until Victoria records an average daily case rate over two weeks of five or less, and fewer than five cases requiring investigation.

Achieving this threshold will trigger the next stage, allowing hospitality businesses to open for outdoor seating services. Retailers, gyms, fitness centres and offices closed under stage four will also be allowed to re-open as more industries are reclassified from “heavily restricted” to “restricted”.

Although the government says regional Victoria will open up slightly faster, hospitality businesses in Melbourne will not be able to host patrons indoors until at least 23 November, when Victoria is predicted to record no new coronavirus cases for 14 days.

Once the state has no active cases and no new cases are recorded for 28 days, it will move to “COVID Normal” restrictions.

In light of the pain ahead, Australian Venue Co. (AVC) is calling on the Premier for a clear and considered support plan for hotels.

“The industry needs clear guidance moving forward and support so it can survive,” says Paul Waterson, CEO of AVC, one of the country’s largest pub groups.

“We recognise the challenges facing the Government, but if they don’t want hospitality to open, they need to provide real support.”

Premier Andrews suggested the wind-back roadmap was a balance between public health and economic concerns, and pledged government would work with industry bodies – particularly hospitality.

AVC holds 31 closed pubs in Victoria, which it says cost over $2,000 a day to keep closed, yet it has received the equivalent of $26.58 per day for each from the Victorian State Government, representing less than 2% of the costs.

“To put the situation into perspective, we have received about 10 times the support from the Queensland Government during the shutdown in that state, despite the Victorian shut down being four times as long,” notes Waterson.

Victorian hotels and pubs will “bleed” with debt and face financial ruin, according to the AHA (Vic), which is bitterly disappointed with the further delays to re-opening, suggesting the State’s government “look to the expertise” and proven ability to manage seen in New South Wales and Queensland.

The Association points to its 1,450 members, employing more than 52,000 people and contributing $4.2 billion to the Gross State Product in considering an existential change to the hospitality landscape from which it may not recover.

“We are on the verge of becoming a ‘welfare state’ if our members are any indication as to the impact that lockdown restrictions are having on us,” says AHA (Vic) President David Canny.

“We have ongoing mounting fixed costs – electricity bills, insurance, Council rates and lease of equipment – of which there is no relief.

“Each pub has a limit of just how much debt it can take before decisions are made to close the business for good.

“We are on the edge of that debt cliff and unless Government commences our re-opening then it is over we go.”

Canny charges that closing industry was an easy decision for government, and that the truly hard choices are being made by people facing mounting debt, employee welfare and mental health concerns.

“Our country pubs and those in other states have proven the hospitality industry can comply with restrictions and minimise cases. We believe we can achieve this here.”

Victorian testing

Victoria has maintained a widespread and vigilant testing regime, seen in the 197,436 tests performed in the two weeks to 6 September. Total cases to date number 19,538, resulting in 666 deaths, equating to a case mortality rate of 3.41 per cent – slightly higher than the current global average of 3.26 per cent.

But importantly, the percentage of positive tests in Victoria has fallen to an average of only 0.6 per cent, and just 0.2 in regional areas.

The World Health Organisation (WHO) recommends COVID-affected communities do not make moves to reopen economic activity until community spread is contained and widespread testing shows positive results in less than five (5.0) per cent of people tested.

By this measure there could be considerable room for greater easing of Victoria’s restrictions, particularly in low-impact regional areas.

Yesterday Victoria reported 63 new cases of coronavirus, today it reported 41 new cases.

The Andrews government has suggested there could be further support for highly impacted industries, flagging exemptions for food service businesses without outdoor dining and repurposing areas such as carparks. “I think the hospitality industry will look different,” said the Premier.

Late September the Federal JobKeeper program will reduce benefits, further affecting the income of many workers and viability of businesses relying on the support, just as Victoria emerges from stage four, with businesses still closed.

Australian Venue Co. notes the “catastrophic” impact of the pandemic crisis, revenue reduced 100 per cent in its state of origin for six months and forced to stand down almost all its Victorian staff.

“We are one of the lucky ones, as we have financial backing to support us, but there is a risk that Melbourne’s hospitality landscape will be changed irrevocably if support is not put in place immediately,” bodes Waterson.

“The hospitality industry is one of Victoria’s largest employers. With a workforce that is made-up of many casual staff and visa workers, there are countless people that have no work and no support from the Government during this time.

“We need to get people back to work as soon as it is safe to do so in order for them to earn a living. We need to get the hospitality economy to start running again, while being proactive in managing and mitigating risk.

“But we are looking to the Victorian Government to provide support as the hospitality sees a slow exit out of lockdown. As one of the first industries to shut down, and one of the last planned to re-open fully, this is desperately needed, to offer hope for the hospitality industry.”