Hotel crisis in the Caribbean region

To try to understand the magnitude of the crisis that the tourism sector is experiencing in the Colombian Caribbean, you have to put numbers. In April 2019, approximately 450,000 tourists arrived in the region and today, a year later, with the hotels closed by the coronavirus, the only guests are the people who were stranded by the mandatory isolation: more than 30,000 jobs are at risk due to the financial crisis facing the union. Only in Cartagena, San Andrés, Barranquilla and Santa Marta this sector offers work to more than 35,000 people.

Cartagena, for example, received in 2019 about 2,317,000 national passengers and more than 528,000 foreign tourists, according to Irving Pérez, president of the Tourism Corporation of the capital of Bolívar. To date, the 300 hotels in the city have paralyzed activities. “More than 4,000 tourism service providers and nearly 30% of the city’s jobs are facing a possibility of disappearing, as they do not have liquidity Enough to meet the obligations corresponding to payroll, leases, services, financial and all those for its operation “, explains Pérez. In Colombia, $ 210,000 million are needed monthly to pay 110,000 workers in the hotel sector, of which more than 30,000 are from the Caribbean region.

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Given the accelerated impact of the economic recession in the tourism sector, the national government implemented a series of measures to mitigate risks, such as extending, until the second half of this year, the parafiscal contribution for the promotion of tourism and the line of “Colombia Responds” credit with a quota of $ 250,000 million, and thus alleviate the cash flow of companies in the tourism sector; line launched by the Ministry of Commerce, Industry and Tourism (MINCIT), through Bancóldex.

Through the line of credit, 334 credit operations have been carried out, as of May 4, for a value of $ 192,260 million. “These resources have been assigned to 298 tourism, aviation, live entertainment companies and suppliers to these industries,” said Julián Guerrero, vice minister of Tourism.

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“We have seen the decrees to defer payments from the parafiscal, but what we are asking for is accompaniment and support. It is not going to happen that when we open they come to charge us everything because we do not have money, ”said Omar García, director of Cotelco Magdalena, where there are more than 3,850 tourism service providers, including hotels, hostels and other types of accommodation.

Not very different is the panorama in Santa Marta. “At Easter, for example, more than 100,000 tourists arrive, generating an income of approximately $ 110,000 million. Now imagine for a whole month. Only in Santa Marta, more than $ 250,000 million have been stopped by tourismGarcía explained.

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Hotel businessmen say that access to Bancóldex loans has been complex, making it impossible for them to have the financial liquidity to meet payroll obligations. “The financial sector has classified us as a high risk sector and that is why loans have been very restricted”, Says Gustavo Toro, president of Cotelco.

“It is important to recognize that the credits have not reached all the entrepreneurs, which does not mean that the line has not been effective. Access to loans is made through the first-tier bank, which in any case must carry out a risk analysis of each individual request, “explained Guerrero, adding that the competence to monitor financial institutions is held by the Financial Superintendence of Colombia.

Meanwhile, the hoteliers know that the banks’ refusal is due to the lack of credit life and the lack of monetary liquidity to respond to the credit shown by the studies carried out by the banks. “If we are not producing, it is like lending money to a person who does not have a job, there is no certainty when it will be paid,” says Pedro Mesa, manager of Dann Carlton in Barranquilla, who took this alternative to cover expenses during the emergency. “For confidentiality I reserve the figure, but it was more than $ 1,000 million. That is enough for three months of payroll with their respective contributions and tax obligations, ”said Mesa.

In the capital of the Atlantic, with 10 days until the Assembly of the Inter-American Development Bank (IDB), all reservations were canceled. According to Mesa, “non-sales were in the order of $ 1.5 billion.” That was the beginning of the fall for the hotel sector in the department; to date, 190 of the 200 establishments that exist are paralyzed. This represents a risk for approximately 8,000 direct and indirect workers. “We are talking about losses between $ 20,000 and $ 25,000 million at this time”Said Mario Muvdi, director of Cotelco in Atlántico.

For example, the Dann Hotel closed on March 16. Since then, about $ 3.5 billion has been stopped moving. “It is very difficult to maintain the entire payroll. Today we are forced not to extend contracts “, says the manager, who adds that the payroll expense is $ 650 million per month. Of the 180 employees they had, they already have 165.

Since the beginning of the quarantine, the hotel sector has been affected, since with the closure of the land, air and sea terminals, demand fell. “To date, hotel occupancy in the country is 2%, and losses are $ 1.2 trillion for each month that it stops operating,” says Gustavo Toro, president of Cotelco.

The hotels in the Colombian Caribbean that have a minimum number of guests, are due, in large part, to foreign citizens who were stranded, health personnel and security guards who take care of the buildings. In fact, the Ministry of Commerce, Industry and Tourism arranged more than 9,000 hotel rooms, in 30 municipalities of the country, to be used to support the coronavirus health emergency.

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The tourism sector agrees that the revival of the market will not be this year. “We believe that at least it will be a difficult year. As long as there is no vaccine, crowds are banned and airports do not open, tourism will be affected, “concluded Toro.

From Cotelco, the hotels were asked to eliminate for two years, once operations are reactivated, VAT on accommodation for Colombians; With this they hope to increase the flow of visitors. “People go first to pay their financial obligations (car loans, houses, banks), last they will think about traveling“Said Omar García, director of Cotelco Magdalena.