The effect of the coronavirus on tourism, and particularly the hotel business, was a blow to the waterline of Hotusa. The chain, which runs 200 hotels mostly through the Eurostars and Exe brands, saw its revenue fall from almost 1.27 billion in 2019 to less than 310 million last year. Despite expenses falling ostensibly - procurement fell from 790 million, in 2019, to 193 million and salary payments fell from 108 million to 58 million - operating profit was inevitably negative at 127 million (down from a positive 124 million two years ago). Losses before tax rose to almost 156 million.

The company's annual report admits that "the outbreak of the covid-19 pandemic and the measures taken by governments in countries around the world to mitigate the spread of the pandemic have significantly affected the group", particularly through hotel closures for extended periods of time. But Hotusa estimates that the 103 million in liquidity it had at 31 December and the plan presented in this regard are "sufficient to cover its operating needs" during the current financial year. Of this 2021, the managers of the chain expect "a recovery of sales and an almost full opening" in the second part of the year. But they admit that even so the production capacity will be "between 40% and 50%" of what they had in 2019 and will not be fully restored at least until 2023.

That is why the company "expects to continue in losses during the 2021 financial year" and "to be able to return to profit by the end of 2022". The report gives an account of the tools with which the management of the hotel group seeks to ensure its survival. The first of these is to obtain additional funding, for which talks with financial institutions are cited. In 2020, the parent company of the hotel group and its subsidiaries have already requested credits for more than 104 million to different banks in the lines guaranteed by the ICO (Official Credit Institute). More than a third of that amount was offered by Santander through two loans. In addition, several subsidiaries requested loans from the Institut Català de Finances for a combined value of 15 million. Debts with credit institutions last year rose to 847 million, compared to 757 million in 2019. However, debt maturing in the short term fell compared to the previous year, from 87 million to 74 million.

Million-dollar bailout

In parallel, the company began the process to obtain money from the SEPI rescue fund. The annual report does not detail the amount requested, but it does specify that it will be used "to cover the liquidity needs that may occur in the next two years [referring to 2021 and 2022]". It also states that the company "is eligible and meets all the requirements" for obtaining the aid. Sources familiar with the process put the requested bailout at more than 240 million, which is still pending resolution. That amount makes it one of the highest of those who have asked for tourism companies. Among those already resolved, the largest is the 475 million granted to Air Europa, followed by the 320 million of Ávoris (the company that merged the travel agencies of Barceló and Globalia groups).

Another mechanism that Hotusa has to weather the crisis is the renegotiation of leases. A large part of the hotels it manages are not its own buildings and it pays a lease for them. The memory ensures that there is additional room to negotiate more downward rents. Last year, agreements with property owners led it to save some 23 million euros, paying a total of 79 million in operating rents. The two largest, the accounts point out, are those paid by the Eurostars Madrid Tower, a hotel located in one of the four skyscrapers that close the Paseo de la Castellana in the north of the capital, and the Eurostars Grand Marina, another hotel in a landmark building, in this case in the port of Barcelona. Together, they accounted for an expenditure of 14 million last year. In the need to find liquidity, Hotusa has also resorted to the sale of some of its own establishment, as cited in the events after the closure with a hotel in Madrid that sold on March 4 this year and for which it obtained more than 13 million.

Among other measures cited by the company to preserve its financial position, include the reduction of capital expenditures and marketing or freezing non-essential hiring. In the personnel chapter, the accounts point out that "virtually the entire workforce" was already affected by temporary layoffs (ERTE) in 2020. The estimated cost savings of these temporary layoffs, which are reported in the section on government aid, is 59 million euros. This circumstance makes it impossible for the company to consider distributing dividends charged to last year, according to the annual accounts.