More than 450 nightclubs and bars will not reopen after the pandemic
The pandemic has affected many sectors in the Canary Islands, which are facing their economic activity with restrictions that hinder their profitability; however, one of them has not even been able to integrate into the new normal, nightlife. After a few weeks of opening at the end of de-confinement, a closure was decreed again in August, for which there is still no reopening date.
This closure has now lead to more than 450 bars and discotheques that have permanently closed their shutters and will not reopen in the Islands when the health crisis passes.
Business owners warn that there will be many more if a system is not articulated that allows them to maintain their activity with restrictions, as has been done with other sectors such as the hospitality industry. This is what the secretary general of the Canary Nightlife Association, Alejandro Negrín, believes, who points out that less than half of the Archipelago's leisure venues will be able to maintain their activity when they are allowed to reopen.
In the Canary Islands, before the pandemic, there were about 346 venues that were exclusively dedicated to offering musical activity. "Of these, 160 have already gone bankrupt," says Negrín. But the Archipelago's nightlife is also made up of about 1,300 businesses that also function as a restaurant, a show venue or a cocktail bar. “Many colleagues have the double license format, especially in areas with a large tourist influx to offer a greater variety,” he explains.
After being closed for nine months, the losses accumulated by the sector are in the millions. According to estimates made by this association, these companies have lost 89% of their turnover this year, a percentage that translates into approximately 890 million euros, since the sector maintained a business volume that was around a billion per year before the pandemic, and represented 3.2% of the Gross Domestic Product (GDP) of the Canary Islands.
"With these percentages of losses it is very difficult to survive, it is as if someone who normally receives a salary of a thousand euros is barely paid a hundred," he said.
Negrín states that less than half of the sector will be able to resist a situation like the current one. "We can save the 15% that we have renegotiated mortgages and achieved moratoriums for; there’s another 20% who own their premises; and 10% who have agreed with their landlords to stop the rents”, he maintains, “so that almost 60% of the business owners are waiting to see what happens.”
However, he warns that many have already signed their death warrant if a date is not specified by the end of the year to promote the reopening. "If this is not the case, by December 31st, they will have to terminate contracts to avoid greater evils," he said.
That means a dramatic situation not only for employers, but also for the more than 9,600 workers who depend directly on this sector, a staff to which there are another 3,800 employees who work in premises that also carry out other activities.
The Government of the Canary Islands published a plan of aid to the sector on December 2nd, to the amount of three million euros. The objective was to collaborate in financing costs that these companies could have, that have been forced to suspend their activity due to the health crisis. Aids that the sector appreciates but that are clearly insufficient to refloat all businesses.
Negrín assures that they have been negotiating with the Government of the Canary Islands since August 20th when the total closure of the establishments took place. "An economic rescue has always been necessary," he specified, but points out that "aid that in August or September would have saved many companies, now arrives too late."
Many of his companions have not been able to resist and others will not be able to take refuge because they do not meet all the requirements. "It is logical as in any public aid that is forced to be up to date with payments with the Treasury and Social Security, but after nine months of closure many are not," he laments. For this reason, he insists that "at least the expenses generated by the public administration should be frozen."
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Negrín indicates that the businessmen of the nightlife sector have no hope of being able to open for Christmas, a time of year that for them represents a significant volume of turnover. "We regret that in the Christmas campaign, which could save many companies, some opening format is not possible."
In a meeting with the President of the Government of the Canary Islands, Ángel Víctor Torres, on November 24th, they presented a series of proposals to enable an alternative to the sector and avoid the bankruptcy of many companies and the loss of thousands of jobs. The main one is to provide an opening format that makes the development of the activity viable. The Nightlife Association called for even a stricter regulatory framework and a harsher sanctioning regime for those venues that do not comply with it.
"We are aware that a reopening would cause alarm in public opinion," acknowledges Negrín, which is why he advocates restoring confidence by imposing a stricter regulatory framework. "It is something that the vast majority of employers agree on because it would allow them to resume activity." However, they haven’t yet received a response from the Government.
Becoming restaurants or terraces is not an alternative either:
Given the closure decreed in August for venues dedicated to nightlife, one of the alternatives that was raised, was conversion to bars or restaurants in order to maintain an activity that would save businesses. Some city councils authorized to change the use and activity of these premises so that they could open during the day and install terraces.
However, Alejandro Negrín, the secretary general of the Canary Islands Night Leisure Association, warns that this mechanism is not a lifeline for the sector either. "Many of those who have decided to function as a bar or restaurant have the handicap that they have 100% of expenses, but they continue to accumulate losses of 80%," he said.
Negrín also said that although the procedures have been put in place to temporarily change their activity, "no-one is capable of doing this process in four or five days, but it is the usual and heavy processing of always", so he considers that it can be a way to save business in the medium term, but not an emergency measure unless the process is sped up.