More Than 170,000 Businesses are at Risk, Including Hotels and Restaurants 

Cara McErlean

In the wake of current government restrictions extending until the end of April, the tourism industry will decrease by 142 billion CZK. Approximately 173,000 full-time jobs will be directly threatened.

If restrictions against the spread of the disease continue until the end of June, the impact will increase to 202 billion CZK and threaten 246 thousand jobs, according to studies by the Czech Association of Hotels and Restaurants (AHR) and Economic Impact.

Another scenario considers the possible impact if restrictions continue until the end of April and borders are closed by the end of May. The number of visitors would fall by 47 percent, impacting sales of tourism-related services, which would mean a decrease of 286 billion CZK. This option would deprive public budgets of approximately 60 billion CZK.

If government restrictions lasted until the end of June and the borders remained closed until the end of August, the drop would be 67 percent. Taking into account revenues from services related to tourism, this would mean a decrease of approximately 408 billion CZK. Public budgets would lose about 86 billion crowns.

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President of the Association of Hotels and Restaurants, Vaclav Starek, said that it is necessary to maintain the business in order for industries to be able to recover as soon as restrictions are released. According to Starek, the state should provide entrepreneurs and businesses with tax relief, wage allowances, and tax breaks in order to start-up tourism, pay wages and contribute to employees.

“It is not only about overcoming the period of validity of the current crisis measures, but also the subsequent period when entrepreneurs will start from scratch and often with losses,” Starek added.

According to Stark, the AHR has offered Prime Minister Andrej Babiš (ANO) accommodations for rescue teams and other workers who are helping in the daily fight against coronavirus. Hoteliers are ready to provide facilities for seniors, and many restaurants are already helping provide meals to those in need.

“However, under current restrictions, it is still not possible, for example, to provide accommodation for workers traveling and working in the field, for example, on electrical wiring and maintenance of the state’s basic infrastructure,” said Stárek.

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Entrepreneurs will be able to apply for interest-free loans from 10,000 to 15 million CZK with a one-year delay in the COVID II Loan Program. The loans will be provided by commercial banks and will be guaranteed through the Czech-Moravian Guarantee and Development Bank.

The government also approved the waiver of social security and health insurance contributions for sole proprietors for six months from March to August, up to the minimum advance payments.

They will also forgive the June advance on income tax for sole traders and companies, the second for quarterly payers and the first for semi-annual payers. Short-time work was also approved for coronavirus-impacted companies. The state will pay these workers between 50 and 80 percent of their salaries, which have been impacted due to restrictions on production or services.

At a Monday meeting, the government extended its restrictions until April 1. Restaurants will remain closed, and most shops, hotels and spa facilities may not offer services.

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