Clear blue skies, pristine waters, and powdery white sand seemingly much whiter as it appears reflecting the sun’s relentless beams.
This has been the image of Boracay circulating on social media the past weeks. It seems to be the perfect time to go to paradise. The Philippines’ most popular island is devoid of tourists that usually come in droves. Last year, Boracay hit an all-time high of over two million tourists, with around one million foreign travelers recorded with 80 percent comprised of Chinese and Koreans.
Since the COVID-19 crisis started, foot traffic in Boracay dropped to numbers lower than any rainy season in recent history. Travel restrictions have hurt the revenue stream of hotel and restaurant owners. “We’ve heard of hotels on the island having only between 4 to 15 percent occupancy despite massive discounting—a sign that there are hardly any visitors to the island. We have already had to close [our] restaurants [except for Coco Mama La Union] because of the lack of customers and overheads that we cannot clear anymore,” says Nowie Potenciano of The Sunny Side Cafe, Spicebird, Supermagic Burgers, and Coco Mama.
“Sales for one of our shops have gone down by almost 80 percent from January to February. Meanwhile, our other restaurants have seen drops by 60 percent from the previous month.”
Potenciano also has Coco Mama in La Union but still fears for the worst. “Thankfully, we have not felt a significant decline there yet because most visitors to that area are Filipino and they can still easily access La Union by driving. But with COVID-19 cases exponentially increasing in Manila, we fear that it will only be a matter of time before our sales there also decline.”
“Sales for one of our shops have gone down by almost 80 percent from January to February. Meanwhile, our other restaurants have seen drops by 60 percent from the previous month,” says Nowie Potenciano.
The downward spiral is already palpable in the capital. Marydae Hannah Ramos, owner of food stall brand Chizmozza located in malls across NCR and nearby provinces, explains, “After just a week, our sales declined dramatically. Revenues decreased by 50 percent. We are at risk of closing some branches because if this continues, we cannot afford to pay operating expenses.” As of writing, they still operate from 11 a.m. to 7 p.m.
According to Victor Barangan, board member of Hotel and Restaurant Chefs Association of the Philippines, cancellation of events has been one of the top reasons for the acute decline in revenue. Their group forecasts that this downward trend will persist for the next two to three months. So how can the food and beverage industry cope?
With depressing revenue that couldn’t even cover operational expenses, business owners are currently pushed to a corner with scant options. But one thing’s for sure: They don’t want to let go of employees. This time of crisis is when they, as entrepreneurs, are needed most. “Business will still continue. Companies will always take care of their employees,” says Barangan.
Currently, they recommend their regular employees to use their vacation and sick leaves. However, some were forced to dismiss casual workers or employees on temporary employment contract or employed under agencies such as janitors, dishwashers, and housekeeping staff.
“The impact of the coronavirus on our employees is obviously significant. In order to survive, we have reallocated our staff from the shop that closed to our remaining restaurants that are still open. That means our staff will have to share whatever service charges they are receiving to a larger number of people. We have also had to reduce the number of working days of our staff from six days to five days a week,” says Potenciano.
Barangan looks to limiting energy costs and developing smart menus in which buffet is not recommended. Potenciano adds that they are controlling inventories with significantly less stock covers. “On the demand side, we continue to do discounting to encourage visitors of one restaurant to patronize our other shops,” he says.
Ramos, on the other hand, geared up for another strategy. She recently partnered with GrabFood and Foodpanda to push sales of their products in Metro Manila. Looking ahead, she is planning to expand the online selling of their frozen mozzarella bites and sticks. “I am planning to focus on wholesale. We are currently looking for resellers of our frozen products,” says Ramos. Rental discount from lessors will help them immensely, she laments.
Pleas to government
While different cost savings strategies are being implemented, restaurant and hotel owners cannot survive this onslaught alone. “We could use some bold moves from the government at this time. For example, if the Department of Finance can instruct banks to freeze mortgage and loan payments as they have done in Italy, this will cushion the impact of this crisis on both businesses and employees,” says Potenciano.
Currently, they recommend their regular employees to use their vacation and sick leaves. However, some were forced to dismiss casual workers or employees on temporary employment contract or employed under agencies such as janitors, dishwashers and housekeeping staff.
The Bureau of Internal Revenue’s deadline for payment of income tax is on Apr. 15. So far, the agency sees no need to extend as of the moment, according to BIR official Rosario Padilla during a media briefing. However, Ramos stresses that the government should exercise due diligence to lower risks of losing business, especially MSMEs, amid COVID-19. “Instead of requiring us to pay our income tax, I hope we can be allowed to use this to support our employees and operations,” she explains.
Despite the downturn, restaurants and coffee shops are extending gratitude to our most valued frontliners, health professionals, and staff, with free cups of coffee and food. Medical workers from Makati Medical Center are entitled to a free cup of coffee a day from The Coffee Bean and Teal Leaf until Mar. 31.
Pino and Pipino Veg and Pi Breakfast and Pies announced earlier that everyone in the medical field, including the academe, who are continuously fighting for faster detection and cure, can get free and unlimited brewed coffee until the situation plateaus. Meanwhile, Rue Bourbon sent food to the emergency room staff of St. Luke’s Medical Center BGC.
As of Mar. 14, the total count of confirmed cases is already 98, with eight mortalities. The national government has enforced more stringent measures to slow down the spread of COVID-19, which includes community quarantines, travel restrictions, and curfews.