The economic crisis caused by the three-month lockdown – aimed at curbing the Covid-19 pandemic – is impacting industries in different ways.
One of the sectors that is suffering the most is the catering industry and more generally the Ho.Re.Ca. (Hotellerie-Restaurant-Café). But the restaurants are impacted most severely as the premises are often rented out and the owners are unable to pay them when no revenues are coming in. In the situation we are currently experiencing, the burden of a rent in most situations makes the difference between keeping or closing out the business. Unlike personnel, it is not possible to reduce the rent by reducing the size of the restaurant. In addition, this would limit the capacity with negative impact on turnover.
The closing out for good of many restaurants would not only lead to laying off many people, but would also reduce the overall value of the properties in the areas where the restaurants are located.
Vouchers as an aid to keep catering alive
Vouchers can accelerate the post-Covid-19 recovery of the restaurant sector. The issue of vouchers to be used only at restaurants provides targeted help to one of the sectors that is suffering the most from the current economic crisis. Moreover, it mainly supports small entrepreneurs that are not concentrated in a few geographical areas but spread throughout the territory.
Keeping these economic activities alive would keep many jobs in a geographically even way. It also supports the economic value of many properties owned by private citizens who might otherwise limit part of their purchases, with negative impact on the economy at a time when it is essential to support consumption.
Covid-19 and Vouchers: Suggested measures for the catering industry
Governments should dedicate part of the recovery funds of the post- Covid-19 economy towards the issuance of vouchers that can be spent in catering businesses. Vouchers should be issued at a discount to face value so as to stimulate people to eat at restaurants, providing tangible help accelerating the widespread recovery of many small businesses.
For example, the government could stimulate voucher issuance by contributing 50% of the nominal value with a capped amount per adult, household or business for a couple of months. Then for the following two months the contribution could be reduced to 25-30%. This would stimulate participation in the initiative due to the time-limited opportunity, resulting in a boost to the economy.
The CleverAdvice Team