The coup de grace on hotels, restaurants and catering sector (HORECA) came from the very first days of the state of emergency. As for the accommodation providers, the reduction of tourists numbers (including businessmen visiting the Republic of Moldova) due to traffic restrictions has drastically reduced turnover, especially in urban centers. In a similar situation, are cafes, bars and restaurants which also had to stop working due to restrictions and subsequently faced low demand due to decreased consumption.

Turnover at that time became absolute zero (“zero is zero”) while inventories of products, raw materials, often perishable were still full. Rent, wages, interest on loans are a significant component of costs, which still remained at the same level. According to estimates, about 25-30% of the employees of restaurants that made home deliveries were made redundant, their share in the restaurants that did not make deliveries, was even higher (only the core of the company was retained: the administrator, the accountant, the chef). In individual cases, lessors lowered or even canceled rent payments for the months of March-April, but this act of charity is unlikely to turn into something sustainable. An alternative path for many businesses in this sector, who were not burdened with loans, was to permanently stop the activity by giving up future income but also current costs.

After the resumption of activity, it turned out that a return to normality is no longer possible. In June, sales of catering establishments made up only 30% of that figure in the previous year, while in July about 50%. Under current conditions, most businesses in this sector have counted the months to bankruptcy (about 6-9 months.) According to estimates, in the spring of next year no more than 1/3 of bars, cafes and restaurants that exist today will remain open.

On a social level, the most negative impact comes from the layoffs of staff directly and indirectly involved in the catering sector, which reaches about 50 thousand employees. Taking into account the number of suppliers (about 90 thousand) that supply this sector with raw material, a number of chain impacts are very likely. From the accounts of affected companies, the procedures for qualifying people made redundant as unemployed by the NEA are arduous and lead to no results. During the same period, public institutions operate according to a reduced work regime. The number of applications is large, and in order to avoid physical contact, scanned copies of the document are presented, which are manually entered into the database. Also, subsidizing payroll taxes did not have the expected effect, as employers had little to pay for furloughing and made employees redundant en masse.

A nuisance in the current work of restaurants comes from the unpredictable and uneven procedure of applying restrictions. It is logistically difficult to comply with the new rules, announced by the media at 9 PM and implement them at the opening of the premises the next morning. It would be more appropriate for the entry into force of the new rules to occur in 3-4 days, so that businesses in the catering sector can adjust their business model. Some rules are not well founded and implementable, such as demonstrating kinship or applying the distance of 1.5 meters between customers and not between tables, as is the practice in other countries. Likewise, it is not clear what happens to the older rules since new rules that partially replace them come into force. The activity of control and finding bodies, apart from ANSA, which has clear powers in this field, the police, the praetor and others are present during the control, which is in contradiction with the state’s promise to help. In addition, the fines imposed, are prohibitive.

* This information is collected during the discussions conducted by the experts who elaborate the Impact Study of the COVID-19 pandemic on the sectors of the economy. The data can be taken from the website www.consecon.gov.md only with the obligatory mention of the source “Economic Council under the Prime Minister of the Republic of Moldova” and the specification that “The impact study of the COVID-19 pandemic on the economic sectors is carried out by The Economic Council jointly with the Ministry of Economy and Infrastructure, with the support of the European Bank for Reconstruction and Development and the United Kingdom Government Fund for Good Governance. ”

The Secretariat of the Economic Council to the Prime Minister is supported by the European Bank for Reconstruction and Development, funded by the UK Government’s Good Governance Fund, and the International Finance Corporation’s Investment Climate Reform Project funded by the Government of Sweden’s International Development Agency.

The Secretariat of the Economic Council to the Prime Minister is supported by the European Bank for Reconstruction and Development, funded by the UK Government’s Good Governance Fund.