40% of food and beverage companies consider moving towards insolvency – AHRESP

40% of food and beverage companies consider moving towards insolvency - AHRESP


About 40% of the food and beverage companies are considering going into insolvency, given that the realized and expected revenues will not allow them to bear all the charges, AHRESP revealed today, in the scope of its monthly survey.

The monthly survey by the Portuguese Hotel, Restaurant and Similar Association, carried out in late November, "confirms the situation of profound difficulty in which the economic activities of the restaurant and accommodation are in, after eight months of pandemic crisis".

The companies presented huge billing losses, which are reflected “in the delay in commercial rents, in the total or partial non-payment of many salaries, in the aggravation of the redundancies and in the worrying levels of intention to apply for insolvency”, describes the association.

In the restaurant and beverages sector, 40% of the companies are considering moving towards insolvency, given that the revenues realized and foreseen "will not allow to bear all the costs that result from the normal functioning of their activity".

For the surveyed companies, the break in billing in November was "overwhelming", considers AHRESP. 56% of companies recorded losses above 60%.

As a result of the strong reduction in turnover, around 16% of companies were unable to pay salaries in November and 15% only partially paid.

In view of this reality, 46% of the companies have already made redundancies since the beginning of the pandemic: of these, 30% have reduced their staff between 25% and 50%, and 17% have reduced their jobs by more than 50%.

About 17% of companies assume that they will not be able to maintain all jobs by the end of the year.

With regard to the new Programa Apoiar, at the time of the survey, 46% of the companies reported not having submitted an application. More than 48% of the companies say that, if they do not obtain non-refundable incentives, in the next two months “they do not have enough cash to maintain their business”.

About 78% of companies operate their businesses in leased spaces. 62% of companies have already tried to reduce the amount of monthly income. However, 65% of landlords did not accept any reduction.

Commercial rents generally account for 20% of operating costs. In view of this situation, 45% of tenants are already in default (65% already have three or more months of rent in arrears).

In tourist accommodation, 39% of the companies that responded to the AHRESP survey did not register any occupation in the month of November and 32% indicated a maximum occupation of 10%.

For the month of December, about 45% of the companies estimate a zero occupancy rate and more than 32% of the companies expect a maximum occupancy of 10%, while for the months of January and February the estimate of zero occupancy worsens, being mentioned by more than 56% of the companies.

More than 18% of companies are considering going into insolvency because they are unable to bear all the normal costs of their activity.

For the surveyed companies, AHRESP continues, the break in turnover in November was devastating: 39% of the companies recorded losses above 90%.

As a result of the strong reduction in turnover, more than 25% of companies were unable to pay wages in November and 9% only partially paid.

In terms of employment, 28% of companies have already made redundancies since the beginning of the pandemic. Of these, 33% reduced the workforce by between 25% and 50%, and around 27% reduced their jobs by more than 50%. More than 14% of companies assume that they will not be able to maintain all jobs by the end of the year.

With regard to the new Apoiar Program, at the time of the survey, 65% of companies reported not having submitted an application. Approximately 32% of companies report that, if they do not obtain non-refundable incentives, in the next 2 months they do not have sufficient cash to maintain their business.

Approximately 29% of companies operate their business in leased spaces. 54% of companies have already tried to reduce the monthly income. However, 64% of landlords did not accept any reduction.

Commercial rents generally account for 20% of operating costs. In view of this situation, 42% of the tenants are already in default (60% already have 5 or more months of rent in arrears).

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