Madrid Hotels 2 Billion Euros “Catastrophic” 2020 Losses

The Madrid Hotel Business Association (AEHM) estimates that losses in their sector for 2020 reached more than two billion Euros in 2020, which represented an 85% drop in turnover, and  “a catastrophic year” for the sector.

The government’s state of alarm and confinement order from March to June, meant that all of the capital’s hotels were closed apart from those that had been selected to offer emergency accommodation.

The reimposition of the state of alarm, along with the continuing restrictions on international travel has led to hotel occupancy of around 20% which is far below the 45% level considered to be an industry break even point, forcing many more establishments to close.

The measures and subsequent freeze on international arrivals meant that  70% of tourist accommodation has been forced to close.

The AEHM say the situation is “really worrying and dramatic” for the sector, which represents 7% of the Madrid’ regions GDP, generating more than 185,000 direct and indirect jobs.

The majority of  workers in the sector, are on the government’s job furlough scheme which is expected to run until the end May. 

However the AEHM urged the government to extend the scheme to the end of the year saying that “if it  does not act immediately and commit themselves in a forceful way with precise and effective measures, we will end up with the bankruptcy of many companies and the ERE  (redundancies) of thousands of employees ”.

The assocation highlighted that ” we have adopted all measures to protect the future of hotel companies, their professionals and clients”, applying all protocols “to guarantee the security of our hotels and transmit confidence to visitors to that they can enjoy safe stays” but that  “you cannot continue spending if you do not have income ”