Perfect, thank you very much.
Good afternoon.
We are privileged and pleased to be able to introduce ourselves to you today.
The hotel industry in Quebec is quite unique. It is made up of 85% small and medium-sized businesses, 75% of which are owned by independent entrepreneurs who are not tied to large corporations.
The last few days and weeks have been catastrophic. Between March 10 and 23, nearly 85% of our sales were down. March sales, which are made in two stages, were down by almost 65% compared to last year. A 90% decrease in sales is expected in April and May.
This decrease is mainly related to events and conventions, which are the first big chunk. We are in a period of major events and conventions. We understand the reasons for that, but the majority of the cancellations are for events and conventions, which are basically our bread and butter during the winter.
Currently, 40% of operators in Quebec have suspended operations until further notice. Needless to say, this will create a significant liquidity problem for our companies.
We welcome the fact that the Government of Canada is providing levers and is putting in place standards and aid programs to support our businesses on a temporary basis. The challenge and the fear we have at the moment, beyond the fact that the books are already almost non-existent, is the duration of the measures, because the measures announced will come to an end.
Let's take the example of the 75% wage subsidy for firms whose business has declined by 30%. We expect these needs to continue over time. As long as the tourism machine—business tourism and individual tourism—has not returned to normal, we should continue to support our businesses in terms of cash flow. The end point is difficult to predict, so we have to keep the whole program somewhat open-ended. We have to take that into account, for example by phasing it out gradually.
Many of our businesses are seasonal. Therefore, they were not operating, but they were preparing for the next season with advance bookings for the summer. These bookings are now non-existent, and will probably remain non-existent in the short term.
The 30% loss of revenue in our industry is reflected not only in the losses we have just suffered and which I have told you about, but also in the losses to come, that is to say the bookings planned for the summer. These companies won't be able to operate next summer because they won't have customers.
For us, it is a concern and a fear shared by our members. They are very worried about what will happen next, especially during the high tourist season in July, August and September. We all understand that there will be no tourists. Our livelihood depends on a lot of foreign tourists from Asia. At the moment, all reservations for the fall are cancelled, and cruises are suspended. There is a lot of fear in this regard.
Program eligibility criteria are often difficult to figure out. Some of the measures in place will require further clarification. We are very pleased with these measures, but they need to be clarified.
When the time comes for recovery, we suggest you offer an incentive for companies to hold business meetings. We must not be counterproductive and amplify the health crisis, but once there is some security and it is possible to revive the economy and meetings, there must be a fund available. This could take the form of tax credits for companies to hold events and meetings.
The same is true for Canadians who want to travel in Quebec or Canada. Will it be possible to introduce some form of travel rebate or tax credit that would allow people to spend money at home, whether in their province of residence or elsewhere in Canada? These are the kinds of measures our members are hoping to see in order to make the recovery more dynamic.
Our industry is at a standstill until the health crisis is over. As there is no set date, we have to hold out until the borders reopen. We may have to allow people from the United States and neighbouring countries, as well as Canadians, to travel in our hotels and eat in our restaurants. In the restaurant business it is estimated that one in three restaurants will not be able to reopen. This could also be the case for some small entrepreneurs in Quebec.
It is also important to remember the budget for tourism in Canada. Tourism will need more money in order to properly position Canada's brand. We know that some destinations, such as Las Vegas and Paris, have larger budgets than Canada to promote their destination. As a country, I think we need to reinvest massively in our brand in order to position ourselves at the forefront of the world's top destinations when the health crisis is over.
My last point was raised by the Hotel Association of Canada. The support for small and medium-sized businesses is currently a good program, but it may need to be improved. It is an existing government program. It will have to be redesigned for individual hotels rather than for large companies. Currently, an individual hotel that is part of a large group cannot benefit from the program on its own since it is allocated to the group. Mechanisms may need to be rethought to facilitate entry.
After all, our industry has been badly shaken. We will have a long, painful and difficult way out of the crisis. While we applaud the federal government's very proactive initiatives, I think we need to get closer to the people on the ground to determine how our investors and operators will recover from this unprecedented crisis.