Details revealed: AHA’s proposal to the National Cabinet

06 May, 2020 by Vanessa Cavasinni

Following this week’s first meeting of the National Cabinet to discuss the easing of restrictions, the Prime Minister mentioned the set of recommendations put forth by the AHA as “exactly the thing we’re looking for from industry groups right across the country” in easing restrictions. Australian Hotelier is now able to provide some of the details of the joint AHA and TAA proposal.

With roughly 5000 pubs and hotels shutdown and 200,000 workers having been stood down, the AHA is calling for an “exit strategy” to get these businesses and their staff back to work. The AHA proposes limited trading in pubs to resume in June, with a gradual increase in capacity over the course of 2020.

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In its proposal, the first stage of the exit strategy would stick to the Government’s social distancing principles of 1.5 m and one person per 4 square metres, and would also include:

  • Encouragement and promotion of use of COVIDsafe app
  • Staff training in safe work health practices
  • Nominated Hygiene, Capacity and Distancing Supervisor
  • Increased cleaning frequency of all touch points e.g. tables, handrails, taps, terminals
  • Encourage the use of electronic payments wherever possible
  • Reinstatement of about 60,000 direct jobs, plus thousands of jobs in the supply chain.

In the second stage of the exit strategy, further easing of restrictions would be worked through as evidence comes to hand from stage one.

As part of the proposal, the AHA and TAA have put together a comprehensive health and safety checklist to mitigate the spread of COVID-19 in hotels. The thorough list includes a deep clean of venues prior to opening; management and staff training in safe work and infection control; and the revision of venue lay-out to better control patron movement throughout the premises.

The re-opening dilemma

While putting forth this staged re-opening, the AHA has warned that venues will not be able to sustain a 25 per cent capacity – that the one person per 4sqm rule would equate to – for very long, as for most venues this would not even cover fixed costs.

“For the medium term, the AHA believes a capacity limit of 50% will enable the majority of venues to trade in a sustainable way,” states the proposal.

The AHA has acknowledged the delicate balancing act that re-opening would need to strike to ensure community safety, but has underscored the dire need of many businesses who will not survive a the shutdown as it stands for much longer.

The report shows that venues are approaching their own ‘debt cliffs’, laying out that typical AHA member venue will have estimated sunk costs of $32,000 per month while closed, with a  debt cliff of almost $200,000 after six months – and these figures do not include the biggest costs of rent and interest. Thus the proposal underlined the urgent need to re-open as soon as feasibly possible.

The proposal concluded by reiterating the AHA and TAA’s commitment to work with Government in delivering the best possible health and economic outcomes for the country and industry.

“The AHA and TAA understand the delicate balance for the National Cabinet in managing health and business outcomes during this crisis. The AHA wishes to work with governments on the exit strategy for hotels and how best to mitigate health risks while maximising economic outcomes.

“The AHA and TAA believe a staged approach will provide governments, health officials and AHA with knowledge that will assist further decision making as the COVID-19 outbreak becomes increasingly under control.”