Consequences of the pandemic on hoteliers: Cancellations of reservations, temporary suspension of most hotels

The whole current situation around the coronavirus affects tourism the most. Borders are being closed, all events have been canceled, a ban on gathering over 100 people is in force, schools, colleges and ... are being closed.

The whole current situation around the coronavirus affects tourism the most. Borders are being closed, all events have been canceled, a ban on gathering over 100 people is in force, schools, colleges and kindergartens are being closed, and it is recommended not to travel and stay in public places, ie to keep people in self-isolation. Unfortunately, currently in this situation talking about tourism is out of place.

Everyone in the tourist "chain" is under attack, from travel agencies, renters, including hotels, which have high fixed costs of cold drive, and due to the current situation have to temporarily close their facilities. As we can see from the reports on Zagreb Stock Exchange, hotels recorded cancellations of accommodation reservations and various gatherings in the period for March, April and May, a drop in stock prices, but for now there are no significant cancellations of reservations for the period from June onwards, which is good news in this situation.

Although the current annual booking situation is better than last year, Valamar Riviera reports that the number of new reservations has slowed significantly following the coronavirus escalation. The current booking cancellations recorded primarily relate to the period from March to May this year and only to a lesser extent to the rest of the main season which accounts for over 85% of annual operating income. It is stated in a statement on the Zagreb Stock Exchange.

Hotel Medora Auri 4 * started operating on February 04, 2020, but, due to difficult travel conditions from the main emitting markets, it will be closed from March 14 to 30, 2020, ie until the date of change of the stated circumstances. For other facilities Medora hotels and resorts no change in the schedule of operational work is envisaged.

Business until early March, they say Maistra and Adris groupsand, it took place in accordance with expectations, but after the adoption of extraordinary measures and recommendations in the Republic of Croatia and other neighboring countries, cancellations of accommodation and meetings for March, April and May 2020 began, mainly in the MICE segment. There are currently no significant cancellations for the period from June onwards.

Liburnia Riviera hotels state that the occurrence of coronavirus has a negative impact in terms of cancellations and reduced capacity utilization. According to current data, 19% of total confirmed bookings were canceled in February, 64% in March and 62% in April. Cancellations in May and June are slightly lower and amount to 31 and 21%, respectively. Liburnia riviera hotels say that the further duration of the disease will continue to negatively affect their business, and the effects will depend on the duration of exposure to the disease in Croatia and in the countries from which their clients come.

Imperial Riviera states that the current state of provisions is at the level of last year, but the entry of new provisions has slowed down significantly. Cancellations of reservations mainly relate to April and May.

Iz Blue lagoons state that in the period from the end of February the Company recorded cancellations in the amount of 25% of the plan in March and April, while there are currently no cancellations in the high season periods.

Given the current situation in Maestral hotels estimate that the opening of the hotel for this tourist season will not be achieved at the planned pace, and currently only one hotel is open. Reservations from focal states for group arrangements for March and April were canceled, and the entry of new provisions for the rest of the year was slowed by 50% compared to last year.

A large number of canceled reservations in the pre-season and at the beginning of the summer season are also recorded Hotels Vodice, which is why the official opening of the hotel was postponed to mid-April.

Hotels Adriatic according to the first indicators, they expected a successful tourist year, but in the last two weeks their numerous reservations for April and May were canceled, and sales for the rest of the season were stopped. Furthermore, the inflow of funds has been stopped by agencies seeking lower prices, and more flexible cancellation and deposit terms.

Palace hotel Zagreb reports that, after the adoption of extraordinary measures and recommendations, cancellations of accommodation and meeting reservations for March, April and May 2020 began. For the period from June there are no significant cancellations, however new inquiries from the affected emitting markets are missing.

And in Hotels in Zivogosce they expected good results in 2020, but their main commercial partner with a share of more than 81% in total revenues last year, due to force majeure, suspended the contracts, so new negotiations will follow. Although the Živogošće Hotels are optimistic and believe in signing new contracts, they emphasize that they expect potential liquidity problems in the event of continued negative trends.

Iz FTB tourism they say they have a plan to open their hotels in Cavtat on April 1st and 19th, but they cannot say for sure given the slow entry of new bookings and the cancellation of existing ones. High risk for business, as they say, are certainly the legally regulated restrictions on the movement of citizens of certain countries, especially the main markets, Great Britain and France.

HOTELS TEMPORARILY SUSPEND A CERTAIN NUMBER OF HOTELS FOR A PERIOD OF TWO WEEKS

Yesterday, at the meeting of the President of the Management Board of the members of the Croatian Tourism Association, the leading hotel companies made a decision to temporarily suspend the operation of most hotels for a period of 2 weeks. HUT points out that the operation of one hotel for accommodation will be provided in each coastal destination, while the operation of several hotels will be provided in Zagreb. 

As the main tourist season brings hotels, as well as everyone, more than 85 percent of annual operating income, we hope that the whole situation will calm down as soon as possible and that the entire tourist sector can still count on traffic in the main tourist season. Although it is difficult to predict how much this situation, when it calms down, will affect travel in general, ie how long it will take to activate the tourist market. When the situation stabilizes, it will be in everyone's interest for the whole economy to be activated and move as soon as possible, including tourism.

And that is why at the moment perhaps the best advice for everyone in the tourism sector - is to prepare promotional campaigns and strategies, because when the situation stabilizes, you should immediately start aggressively with promotional campaigns, not just start thinking about them and waste time. I know that it may be ridiculous to think about promotion now, to say the least, but we can't influence the current situation, while we can influence the moment of "corona after". And that is why we should all be ready to welcome "that" moment to activate the entire economy as soon as possible, including the tourism sector.

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