Hospitality sector struggles to survive the ‘intelligent lockdown’

On 15 March the Dutch government announced a series of regulations intended to slow the spread of Covid-19 in the Netherlands. Many businesses have been adversely impacted by the new policies, including the hospitality sector, which was essentially forced to stop providing in-establishment service. The rules will be in effect until at least 19 May.

While many businesses, such as pharmacies, grocery stores and clothing stores have managed to stay open during the ‘intelligent lockdown’, others have not been so lucky. The National Institute for Public Health and the Environment (RIVM) guidelines specifically prohibit businesses such as restaurants, cafes and bars from serving customers on-site. The policy has thrown one of the Netherlands’ strongest sectors into financial chaos, with the shutdown drastically impacting both business owners and employees.

According to the Central Bureau of Statistics, more than 61,000 hospitality companies were registered with the Dutch Chamber of Commerce during the first quarter of 2020. Bars, restaurants and cafes made up almost 85 percent of these businesses. Due to the Covid-19 lockdown, many of these enterprises are struggling to stay afloat. According to a study conducted by Van Spronsen, a consulting firm, Dutch hospitality companies face a revenue loss of €4.4 billion if the lockdown ends on 19 May. That number increases to €6 billion if the economy remains essentially shut down until June.

“The bills keep piling up,” says Berto Mulder, chairman of Koninklijke Horeca Nederland, which represents the hospitality sector. Mulder expects a sea change in the industry, as businesses that can’t weather the crisis will inevitably fail.

Hospitality workers are suffering from the lockdown as well. The current regulations preventing bars, restaurants and cafes from serving patrons on-site have particularly impacted employees such as bartenders, servers and cooks, many of whom work through temp agencies or have zero-hour contracts. There are approximately 131,000 servers and bartenders, 55,000 kitchen workers and 17,000 cooks in the Netherlands with a flexible contract. At least 49 percent of hospitality workers employed through a temp agency have lost their job, according to union CNV. As a result of the crisis, the number of unemployment claims filed by hospitality workers jumped by 224 percent from February to March of this year.

To stay solvent, some hospitality companies have begun fine-tuning their business plans to offer services tailored to meet the demands of the new 1.5-meter society. Many have started pivoting away from their former core competencies, branching out to find new revenue streams and ways to serve customers.

Several restaurants that previously concentrated on in-establishment dining have started offering takeout and delivery services. Porterhouse restaurant in Huizen has converted its parking lot into a drive-up, in-vehicle dining area. Instead of serving meals at tables inside, servers bring orders to patrons waiting in their cars. Broei, a popular establishment in Utrecht, also began offering takeout and delivery meals in response to the lockdown. “Pick-up services are extremely popular everywhere right now,” says Bastiaan van der Staak, Broei’s owner.

Hotels struggling to fill rooms have started offering space to workers impacted by the lockdown. The Ibis Styles in Noordwijk has become a co-working hot-spot popular among office workers and freelancers. The hotel’s rooms have coffee machines and free internet. They’re in high demand among those in need of a quiet place — somewhere away from pets, partners, and children — to participate in video conferences and take important calls.

Hotels that have chosen to transform rooms into workplaces must still adhere to RIVM’s safety rules. Establishments have been taking steps to make and keep these hotel-room workspaces safe. At Ibis hotels in the Netherlands, guests must pay by card and may only use the bathroom in their own room. Management has also ensured that all rooms and common spaces have hand sanitizer. “We’ve implemented several measures to minimize the possibility of Covid-19 transmission,” says André Aaij, general manager of Ibis Styles Haarlem City.

But even with these steps, hospitality businesses are still facing financial difficulties, with many businesses only taking in 20 to 30 percent of their normal revenue. “We’re really struggling. The big problem is that we aren’t selling drinks: clients aren’t in the restaurant, so they aren’t ordering coffee or alcohol,” explains Bas van der Staak.

To speed up the sector’s reopening, many cafes and restaurants have developed hygiene and social distancing plans, hoping to persuade the government to allow them to reopen as quickly as possible. “We’re currently busy making everything 1.5-meter proof. Lots of furniture has had to go,” says Ronald Obbes, owner of Lodewijk Napoleon cafe in Assen. Still, more distance between tables will mean fewer customers – will this be enough for struggling restaurants and bars to keep their heads above water?

Written by Lorre Luther