15 pct. of catering businesses could go bankrupt this year, economists warn
Economists expressed their concerns that 10 to 15 percent of Dutch catering and hospitality businesses could go bankrupt this year. The situation should improve once the sector is allowed to reopen in full, and if government financial support provided during the pandemic is also extended, Nu.nl reported on Friday.
The economists also argued a new scheme to reschedule debt payments is needed.
A report on the status of small businesses in the Netherlands carried out by Hogeschool Utrecht and ONL found that 74 percent of small hospitality businesses in the country were struggling to fulfill their financial obligations. About 29 percent of them were already technically bankrupt by the start of April.
Economists from Rabobank and ABN Amro came up with a less pessimistic forecast that around 10 to 15 percent of these businesses will have to close during 2021. "That is still a lot," said Stef Driessen, hospitality sector economist at ABN AMRO.
"The advantage is that pubs and restaurants will soon start receiving money quickly again once we start returning there. Therefore, the reopening of the terraces is a good start at the moment, although at the moment that is still a very small drop in the ocean,” says Jos Klerx, catering industry specialist at Rabobank.
In addition, the Cabinet should examine whether tax debts of entrepreneurs can be waived because tax deferments since the start of the pandemic have stacked up high for businesses in the sector, experts argued. In order to limit the number of bankruptcies, an extension of the support measures is needed until at least when the 1.5-meter rule is abolished, Driessen concluded.
Earlier figures figures from Statistics Netherlands (CBS) show that last year 12 percent more catering businesses closed due to various reasons than in 2019. The number of bankruptcies in the catering industry also rose by 39 percent.