From the boom to thinking about lowering the blind

To close. Do not close. Close … The hotels in Gipuzkoa are defoliating a new daisy almost every week without knowing what will determine that last petal with which they remain in the hand. It is not that they are casting lots, but that The uncertainty in the short term is such that making decisions within fifteen days in these times is audacious and it also borders on wasting time.

The Gipuzkoan hotel sector has been accounting for practically all of 2020. First, to mentalize the losses that those 15 days of unexpected closure were going to entail, which ended up being four months. And now, before the onslaught of a new tsunami, to see which decision is the most pertinent to survive: continue with the establishment open, close until the situation improves, or an intermediate format, in which the blind is drawn on off days during the week and attempts to regain the rhythm from Friday to Sunday.

Elena Estomba, president of Hotels in Gipuzkoa and director of the London hotel and Villa Favorita, predicts that at the end of the month many hoteliers will make decisions along these lines. «In summer we saw that people wanted to move. But in September we hit an impressive slap and the forecasts for the end of the year are complicated. Now I see much more feasible than a month ago the temporary closure of hotels, without a clear reopening date, “he acknowledges.

In the last five years in Donostia, 46 establishments between guesthouses and hotels have been inaugurated
the data

“Now I see more feasible than a month ago the temporary closure of hotels without a clear opening date”
Elena Estomba | Favorite Villa and London Hotel

«There are few events and they do not attract public from outside. The question we ask ourselves is how much longer are we going to be able to hold out?
Fran González | Hotel Codina

While until a few months ago the objective was not to stop, in the Gipuzkoan capital decisions that go in the opposite direction are beginning to be heard, although official closing communications, according to it, there are few. The Villa Soro hotel, which has been closed since summer and the San Sebastián hotel, which has recently closed, is joined by Villa Favorita, which opened in mid-July and has opted to open exclusively at the weekend. “As there are many services that are transversal to the London hotel, we can maintain this formula. A closed, unused hotel ages a lot and very quickly, and starting it up from scratch costs a lot, “he acknowledges.

In the specific case of Donostia, the situation generated by the health crisis is also added to the particularity of being a city that, according to Eustat data, has opened 46 establishments, including pensions and hotels, in the last five years. So they must deal with a considerable increase in supply and almost non-existent demand.

The current occupancy for November and December is 4 and 3%, in the case of Villa Favorita, and somewhat more advantageous in the case of London, which has 13 and 10% of its seats occupied for the next two months. “January I don’t even think about it and the Christmas campaign will depend on how everything evolves,” he laments.

The occupancy rates for next month in the case of the Astoria 7 hotel, one of the largest accommodations in the city, which exceeds one hundred rooms, “7%, and 2% in December.” And despite the fact that both reservations and cancellations occur “more at the last minute than ever”, everything indicates that good times are not coming. The manager of this accommodation, Fernando Soto has already assumed that “the losses are going to be enormous” and every week it is reconsidered whether the hotel is more compensated to remain open or not. «Right now we lose more being closed, although the occupation is almost nil, but every week I monitor the data to establish if at some point I have to change the scene, “he confesses.

Estomba and Soto agree that one of their objectives is try to damage the templates as little as possible, but given the uncertainty and the ever-changing panorama, they do not allow medium-term plans to be made, and for that reason, the Astoria 7 director considers that labor, fiscal and financial measures by the administrations “are more necessary than ever” In this sector.

“Every week I monitor the data in case at some point we have to change the scene and close”
ernando Soto | Hotel Astoria 7

“The opportunity arose to accommodate people who do not have space to isolate themselves at home, and since there are no tourists, we accept”
Carlos Odriozola | Hotel Sanctuary of Arantzazu

Fran González, director of the Codina hotel, has also taken October to reconsider, and once the month is over, we will “make a decision.”

The spike in contagion and perimeter closures “only create more uncertainty”, and if the few events, whether sports or cultural, hardly attract public from outside and many are streamed to hotels is of little use to us ». “The question we all ask ourselves is how long are we going to be able to hold out?”

Hotel social

The pandemic has led to the reconversion of many companies and the Hotel Santuario de Arantzazu, which Carlos Odriozola runs in Oñati is one of them. The summer prospects were poor and “we had the opportunity to participate in an Osakidetza program to house people who do not have the option of doing preventive isolation at home, and we accepted.”

Currently, It has 8 people, but at the beginning of the month the occupation of its 45 rooms was 100%. You only receive covid positives that are asymptomatic or close contacts. “The moment they present symptoms, they are referred to a hospital,” he says.

The Basque Department of Health is at the expense and guests cannot leave the room. Odriozola explored this route with the intention of recovering tourist activity in October, “but seeing how things are, I think it will take a long time.”

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or Messi leaves or has to sell Ansu and lower salaries

He Barcelona Soccer Club owes banks and clubs 820 million euros, of which it will only deduct 332 for pending collections, for which it presents a net debt in the 2019-20 season of 488 million. An alarming figure, since it came from 217 last season, which would place it first in the ranking of debtor clubs in Europe, according to the ‘Financial Year Report’ that the UEFA published annually and that this last year has not seen the light yet due to the appearance of covid-19. Until last year, the Manchester United it was the team with the most debt, with 459 million euros, followed by Inter (438), Atlético (391) and Juventus (291). He Real Madrid it did not appear in the ranking of defaulters.

Barcelona has entered 192 million euros less than what it had budgeted. Out of an expected income of 1,047 million it reached only 855, even if the club warns that, without the pandemic, the figure would rise to 1,059. Barça closes the 2019-2020 season with losses of 97 million euros and the red numbers will continue in 2020-2021, as expected in the accounts.

Big problems for Bartomeu in his final stretch of term.  (EFE)
Big problems for Bartomeu in his final stretch of term. (EFE)

Problems with the wage bill

The revenue forecast for next season, which was initially $ 1.12 billion, has been drastically lowered to $ 791. The ravages of the pandemic, with the lack of public in the stands, will cause 330 million to stop entering. And that makes it a major issue for Bartomeu and its directive the subject of the wage bill. The League will not register clubs whose salary mass exceeds 70% of its budget. At the end of this year, the Barça wage bill reached 636 million, a reassuring 61%. But with revenue declining to $ 791 million, the wage bill soars around 80%. Barcelona has managed to reduce it this summer by 42 million with the departure of players such as Luis Suárez (23.4 million euros gross per year), Rakitic (13.3) or Vidal (9). But with the unexpected decrease in income you need to reduce the wage bill much more.

He has two alternatives: negotiate a salary reduction for the squad, as the club is proposing, or let out players with a high salary weight

Bartomeu’s alternatives are two: generate more revenue by selling players or getting rid of players with high contracts. If you bet on the former, you would have to sell the only footballer who would generate a real capital gain from his transfer, Ansu Fati, for which they estimate that they will get 150 million. The sale of Griezmann or Dembelé, for example, would not be profitable as it cost the club 120 and 140 million euros respectively, unrealistic figures for a market in crisis like the current one. Barça calculates that capital gains from transfers should reach 73 million this season. But Umtiti and Dembelé have not left and now we will have to work on the January market.

The other option is to lighten the salary mass, and in that aspect it also has two alternatives: negotiate a reduction in the staff’s salary, as the club is proposing, or let out players with a lot of salary weight. The first bet is dangerous because it could end with players denouncing their contracts or going free even in January. There is a real risk that footballers will claim their freedom letter, or at least challenge the measure proposed by the club, since they are protected by law with article 41 of the Workers’ Statute. And it would not be the first time that a professional athlete uses the Workers’ Statute to demand the termination of their contract. It remains to be seen how the club acts, which could negotiate the salary reduction with each player individually.

The second would go through letting Messi out, whose salary weight is around 70 million gross per year. A measure that has not been valued, as has been seen when the club refused to let the Argentine leave after announcing his frustrated departure. Messi stays and you have to bear his salary weight, so the solution is to lower the salary of his teammates.

Leo Messi during this Friday's game with Argentina.  (EFE)Leo Messi during this Friday's game with Argentina.  (EFE)
Leo Messi during this Friday’s game with Argentina. (EFE)

The ballast of the Espai Barça

During Bartomeu’s tenure, Barcelona has bagged more than 500 million euros in sales (222 with the payment of the Neymar clause to PSG), but the problem is the very high cost of the operations faced with transfers such as Dembelé (140) or Coutinho (160). Spending on salaries and transfer repayments has triggered the debt, and to this has been added another unexpected burden: the Barça space. The financing of the technological project already reaches 815 million euros of expenditure. A problem that punishes even more the battered culé economy.

Barcelona is the tip of the iceberg, for being the club with the highest salary mass. But the rest of the top clubs in Europe are experiencing similar situations. Dortmund has closed this season with losses of 44 million and already announces 75 for next. Its president, Hans-Joachim Watzke, offered a diagnosis shared by all his colleagues: “We will only benefit again if there are no restrictions on attendance at stadiums. We must be patient. Football is extremely difficult to imagine without fans and it is time to endure “. Roma, who lost 204 million this past year, need to enter 140 million and announced a capital increase in June to try to save the club financially.

Real Madrid, however, saved the season because it had planned a profit of 40 million and that cushion saved it from the impact of the pandemic. The whites, who have turned all their expectations into the remodeling of a new Bernabéu that will boost the club’s ordinary income, are considering an austere budget for next season, which would be around 650 million. Something that would not cause a problem with the weight of your salary bill, since capital gains from transfers such as Achraf, Reguilón and Óscar Rodríguez give margin. And in addition, Florentino already closed a salary cut with the staff last year, given the imminent crisis of the pandemic, which allows him to be relieved.

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