The pandemic is hitting hotel and accommodation businesses hard. Between March and August, hotels, campsites, holiday villages and hostels have more than halved their revenues compared to the same period in 2019. This has led to 10,000 employees being laid off. A new report from the Swedish Agency for Economic and Regional Growth summarises the impact of the pandemic over the year and provides a forecast for developments in the coming months.
Demand for hotels and other accommodation is expected to remain low during the fall of 2020. Accommodation revenue is expected to decrease by around 50 percent, equivalent to 15 billion compared to 2019. This is partly due to reduced travel, and partly to the fact that the average revenue per guest night has decreased for all facility types.
-We see that hotels and hostels are the hardest hit. Both have a large proportion of foreign visitors to big cities, which is one of the segments that has declined sharply. Hotels have also lost Swedish business travelers as a result of increased working from home and digital meetings, says Kristian Seth, Head of Analysis at the Swedish Agency for Economic and Regional Growth.
Risk of more notices and layoffs
During the period March to August 2020, commercial accommodation facilities have lost almost 10 billion in accommodation revenue, corresponding to a 55 percent decrease compared to the same period in 2019.
By August, around 10,000 people had been laid off in the tourism sector. If the pandemic continues into 2021, unemployment is expected to increase further.
– It hits groups with a generally weaker foothold in the labor market, such as young people and those born abroad, particularly hard. Tourism contains many entry-level jobs and about a third of those employed in hotels and accommodation are people with a foreign background, says Kristian Seth, Head of Analysis at the Swedish Agency for Economic and Regional Growth.
Many companies have laid off their staff for short periods of time.
Since the outbreak of the corona pandemic and until August, 1,565 applications from companies in the hotel and accommodation sector with a total of 21,800 employees have been granted support from the Swedish Agency for Economic and Regional Growth.
"The Swedish Agency for Economic and Regional Growth has granted approximately SEK 1 billion in layoff support to hotels and accommodation businesses. It is one of the industries that has been granted the most support in relation to its size," says Kristian Seth, Head of Analysis at the Swedish Agency for Economic and Regional Growth.
The Swedish Agency for Economic and Regional Growth has been tasked by the government to be responsible for cooperation and coordination, knowledge and quality development in tourism, and to be responsible for accommodation statistics, which are part of Sweden's official statistics. The Swedish Agency for Economic and Regional Growth works for a sustainable tourism industry with internationally competitive companies that are willing, able and daring. The goals are a high level of attractiveness as a tourism country, sustainable growth, increased employment and growing companies in all parts of the country.
About the report
The report The effects of the pandemic on hotel and accommodation operations in Sweden describes the impact of the corona pandemic on hotel and accommodation operations. The analysis focuses on the changed demand and the effects it has had on the supply side. Changes in demand are mainly measured using accommodation statistics, which measure guest nights at commercial accommodation facilities in Sweden, as well as passenger statistics on international and domestic flights in Sweden. The effects on the supply side are studied through statistics on notices, statistics on bankruptcies and statistics on short-term layoffs. The report is intended to serve as a knowledge base for the development of policy proposals and targeted efforts for the industry's recovery.
