“This is concerning,” sighs Philip Fenech, reacting to the one-two punch of COVID-related news today.

The first cases of the new, more infectious variant of COVID-19, known as the UK variant after the country where it was first detected, have reached Maltese shores.

To compound matters for the hospitality and leisure industry, the expected 1st January opening date for bars has been pushed back by another month.

“Although fully understanding the measures, from a health perspective, this will only make a tight situation even tighter,” he says.

In a statement made to WhosWho.mt, Deputy President of the Malta Chamber of SMEs Mr Fenech predicted that it would “definitely cause us to be more careful between us, not only in the hospitality industry, but across our daily lives.”

Asked for a comment on the effect the news is likely to have on the leisure and restaurants sector, Mr Fenech said that it will undoubtedly have a negative impact on an industry that was already in a stop-go phase from an economic point of view.

“Even when demand was high, establishments still had to operate within the parameters of the restrictions, serving only a limited number at a time,” he said.

He acknowledged that the effects of the restrictions on the sector have been heterogenous, saying, “Don’t forget that you have businesses in the industry which are popular with Maltese, and others have a mixed clientele. But the business model of a considerable number of enterprises is geared entirely towards tourists.”

He pointed to businesses positioned in the heart of hotel and tourist accommodation areas like Buġibba and Qawra, saying that not even areas like St Julian’s, that also felt the blow, were hit as hard.

“We must remember that some businesses have lost everything they had worked so hard to build, while others are managing to survive with their strong local customer base,” he says.

“This variant strain is obviously going to put us more on guard, because it’s a stronger one that will necessitate stronger precautions. We cannot in any way be complacent.”

Mr Fenech welcomed the further restrictions to control the spread of the new variant but insisted that the industry would require further and stronger compensation.

“We need to look at what the leisure industry is going through and has gone through since March,” he said. “It has already been strained to its limit, for some, and this will only be creating further strains.”

Saying his lobby has been in contact with Government and will “definitely” be speaking to Government in this respect, Mr Fenech stressed that the ability of businesses to hold their position in the market was “crucial” to sustain employment and Malta’s touristic product to be ready and fit for the upturn.

“Our biggest challenge is keeping businesses’ position in the market so that when we have the vaccine, contamination figures will start to reduce, so that some normality in the immediate, medium and long term will be achieved.”

Mr Fenech nonetheless described the sector’s mood as “positive” and hailed its resilience, lauding operators of tourism and leisure enterprises for their adaptability given the tough circumstances.

“It’s definitely a time for Government, business, and the whole public at large to hold hands together to help our economy in these unprecedented times,” he said, before adding with a smirk, “as long as the hands are sanitised!”

He made an appeal for the Government, businesses and the general public to work together, and while thanking the authorities for the implementation of the Wage Supplement, that saved tens of thousands of jobs, the voucher scheme, the rent and electricity subsidies, and other aid, Mr Fenech also pointed out that such assistance to businesses was nonetheless limited, and far from enough to leave some businesses able to hold their position in the market.

“Without that support,” he said, “many businesses would not be here today, preparing for a better tomorrow.”

“Since things have been accumulating, for some businesses more than others, many are feeling the pinch.” He mentions clubs, which have been closed since August, and bars which were shut down and reopened at very short notice, causing a scramble to get rid of stock.

“I told them, please tell them beforehand!” he says, lamenting the Government’s approach to this aspect of its communication to stakeholders.

He says that the biggest cost in the leisure sector is payroll, which is being subsidised to an extent, and rent.

“Many landlords have been understanding,” he says, “while others less so.”

Mr Fenech then made an appeal to all stakeholders: banks, landlords, businesses, the public and Government, for a new understanding.

“Extraordinary circumstances demand extraordinary reasoning,” he says.

“If we do not proverbially hold hands, there will be repercussions.”

“But if we do,” he continues, “this last effort will start us on the road to recovery, slowly but surely.”

He called on landlords to be more flexible, but understood that many have their own commitments.

“A landlord may want to be decent and reasonable, and ask a tenant to only pay 20 or 40 per cent of their regular rent, depending on their economic circumstances.”

“But if that landlord has a loan and the bank wants the full amount, the landlord has no choice but to go back to the tenant and ask for the rent.”

Since many commercial tenants in the leisure sector, least of all bars, are in no position to pay that full amount, the problem is self-evident.

“That’s why the whole economic chain needs this extraordinary understanding between the different elements. So many depend on it – not just the business owner and the employees, but the beverage manufacturers and distributors, the food producers, etc etc.”

“Even the Government depends on this – its revenue is entirely dependent on the private sector.”

“So,” he continues, “everyone is hit hard when a business closes. But the whole chain needs to work together to avoid that from happening.”

“Many businesses have used any financial reserves they had or are dependent on bank support in the last year,” he says.

Mr Fenech points to the tremendous feel-good factor and consumer, business and investor confidence many entered this year with.

“Everyone had a lot of confidence at the end of 2019, which was the best year ever recorded in tourism, that left many new investments that are still being built and good liquidity in certain sectors of the economy.”

“Those with a hotel now have two, those with a garage bought the next one over to house a bigger fleet of car rentals, brands opened up new outlets… It’s all over the economy.”

“Everyone’s got commitments with the bank. Restaurants, sure, but their landlords as well.”

Mr Fenech concluded by appealing for a reasoned approach, saying, “on this island, we sink or swim together”.