The Geneva hotel sector is feeling the devastating effects of Covid-19

Staff at the historic five-star Richemond hotel in Geneva fear being made redundant amid the Covid crisis. Keystone / Martial Trezzini

The coronavirus pandemic has wreaked havoc in the Geneva hotel sector, which depends heavily on international visitors and conferences.

This content was published on June 18, 2020 – 10:24

“We are not denying the impact of Covid-19. We understand that this can put a hotel in the red, ”said Sylvan *, employee of the five-star hotel Richemond. “But when the hotel is owned by a multimillionaire, you can’t understand that you could be fired in such a dramatic way without a social plan. We cannot accept this.

He is one of the 141 employees who risk losing their jobs in this luxury family hotel on the shores of Lake Geneva.

Most have been on partial unemployment since March. However, at the end of May, they learned that management was planning to temporarily close the hotel to limit the financial damage caused by the pandemic. In April and May, its occupancy rate was 10%. Struggling to save their jobs, or at least to get decent severance pay, staff contacted a local union and initiated conciliation proceedings.

“The Richemond case is emblematic and will set the tone for the way in which Geneva wants to approach the situation of these people”, declared Marlene Carvalhosa Barbosa, union secretary of the Interprofessional Union of Workers. (SIT).

“The message I keep hearing, no matter which hotel is, is ‘We are trying to keep your jobs but you have to make sacrifices,’” Barbosa said.

His organization was inundated with appeals during the Covid crisis. During the lockdown, hotel staff were forced to use vacation pay and cut overtime. Some were even invited to work when they were declared to be on short-time work, she said.

It is estimated that 13,000 of the 15,000 hotel and restaurant workers in Geneva were said to have been put on leave and short-time working during the lockdown, receiving 80% of their salary. But surviving on noticeably low wages in an expensive city like Geneva is difficult. A gross monthly salary for a hotel worker rarely exceeds CHF 4,500 ($ 4,740); most earn around CHF 3,400.

Business tourism

Nationally, the hotel industry is expected to lose 1.8 billion Swiss francs in revenue this year due to the pandemic, with overnight stays expected to fall by a third in 2020.

Cities have been the hardest hit and Geneva is one of the hardest hit. In recent years, it has recorded the second highest number of annual hotel nights among Swiss cities. But during the crisis, occupancy rates were close to zero; properties have closed and most reservations have been canceled until June.

“It’s a disaster. Geneva is almost exclusively built on business tourism – major conferences, meetings and international organizations and banks – which accounts for around 75% of its overnight stays,” said Thierry Lavalley, General Manager of the Grand Hotel Kempinski Geneva five stars.

“Today, business is completely paralyzed. All major conferences at the Palexpo convention center have been canceled until December 31. Many large international companies have insisted that none of their employees travel before the end of the year. 2020 is over.

Around 300 international meetings and events have been canceled in Geneva due to the Covid, resulting in the loss of millions of francs.

Currently, 60 of the 125 Geneva hotels remain closed. At the height of the confinement, 84% of restaurants and hotels in the city were closed. A recent study of the impact of the Covid crisis on the Swiss tourism industry found that each Geneva hotel lost an average of 1.7 million Swiss francs in revenue in March and April, and around 1 million Swiss francs in May and June – the highest of all Swiss regions.

Beyond the loss of turnover, the study warns that the risk of bankruptcy is the highest among Geneva hotels and restaurants (35% potentially affected).

Several hotels have since opened. But according to Lavalley, who is also president of the Association des hôteliers de Genève, the vast majority only have a handful of guests and occupancy rates for this summer vary between 5-8%. “Many hotels are now operating at a loss,” he said.

Good news on the horizon?

On June 15, Switzerland reopened its borders with many other European states after the coronavirus situation improved. For the moment, Switzerland specifies that it is not yet possible to authorize travel outside the European Schengen area. For example, a visitor from the United States or China cannot enter Switzerland. A gradual reopening to other countries could start from July.

At Geneva airport, stopped for months, 2,500 passengers landed on June 15. But at this time of year, the number of daily passengers normally oscillates between 40,000 and 60,000. The airport expects 70 to 80% fewer passengers this year compared to 2019.

“Things will probably pick up tentatively in July and August. The big question is September-November, ”said Adrien Genier, Managing Director of Genève Tourisme.

He said Switzerland’s recent ranking as the “safest country for Covid-19” was useful as a marketing tool to attract visitors. But he remains realistic.

“Over 80% of the people coming to Geneva are foreign visitors and a large number are from the United States, Britain and the Gulf States, and they are well closed at the moment,” said Genier.

What about Swiss tourists?

Swiss tourism officials and government ministers hope residents will spend their holidays in Switzerland this year rather than abroad. But will they choose Geneva rather than the mountains of Graubünden or Valais?

In an attempt to rectify the situation and boost attendance, the Geneva government wishes to offer hotel rooms at reduced prices (1/3 of the original price) to Swiss residents to stay in the region this summer. The authorities have planned a budget of 4.5 million francs to finance the idea, which has yet to be validated by parliament.

Lavalley welcomes this measure but remains pessimistic about the future.

“The prospects for an economic recovery are very blurry. In general, the hotel industry is the first to enter a crisis but the last to come out. The crisis is not just three months of coronavirus. Its side effects are enormous. It will last several months, even years, ”he said.

And if the Swiss authorities do not extend the partial unemployment measures beyond September for at least 12 months, there will be an economic catastrophe with all the partially unemployed losing their jobs, he added.

* name changed to protect anonymity.

Peter M. Doran