WINNIPEG — The return of increased restrictions has now created conditions similar to March/April 2020. With high fixed costs and debt obligations, many hotels may not be able to weather the sustained loss of income, said MHA’s Scott Jocelyn.
In a new report released Nov. 10, The Manitoba Hotel Association found that the province’s hotels are still hurting form the first round of closures and the new restrictions leave them with no end in sight. The study, prepared by MNP, found that hotel revenues, profits, and employment plunged in the spring as a result of pandemic shutdowns and restrictions, and have not returned to anywhere near normal levels.
“Manitoba hotel revenues, profit and employment plunged this spring when shutdowns were put in place, with conference hotels reporting an 89 per cent drop in profits and 80 per cent cut to their workforce. Months later, hotels haven’t returned to anywhere near normal levels,” Jocelyn told CTV news on Nov. 10.
“We’re not debating whether these are right or wrong things to do — smarter people than I am are making those decisions. But I think we really wanted to make the case that, ‘Hey, we’ve been impacted and the protocols are further impacting us. We’re going to need assistance’.”
The study found that the federal government’s Canadian Emergency Wage Subsidy (CEWS) was the most helpful for the industry, while provincial programs haven’t been widely accessed.
Jocelyn said that hotels need help from the province to pay for upcoming bills including property taxes.
The financial impact portion of the study found that in 2019, Manitoba hotels employed about 10,900 people and supported another 3,500 jobs. The industry contributed almost $400 million to the provincial government through taxes, liquor sales, and VLTs.
“Hotels are an economic powerhouse for the provincial government,” said Jocelyn. “When hotels suffer, provincial revenues suffer.”
With the Code Orange and Red restrictions that have been introduced recently, hotels are once again facing the devastating economic conditions they experienced in the spring. The MNP study found that hotels have already taken steps such as deferring long-term debt payments, cancelling planned upgrades, cutting discretionary expenses, and making significant changes to staffing at all levels. However, with high fixed costs and debt obligations, many hotels may not be able to weather the sustained loss of income.
“This is an industry in crisis,” said Jocelyn. “We need help if are going to continue to be here to contribute to Manitoba’s economy when the COVID-19 pandemic is over.”
The province of Manitoba moved to the Code Red level on the #RestartMB Pandemic Response System on November 11 in an effort to halt COVID-19 transmission.
“We are at a critical point in our fight against COVID-19 and we must do everything we can to protect our most vulnerable Manitobans and ensure our healthcare system is there for Manitobans, when they need it,” said Premier Brian Pallister. “This is a team effort and we all have a role to play in protecting ourselves, our loved ones and our community. By taking these measures seriously, we are going to save lives.”