Business Lockdown: For hotel owner, government ‘needs to step up’

Editor’s Note: Ukraine’s businesses are struggling after the country introduced nationwide restrictions on movement and travel starting on March 12. The restrictions have been toughened since then and are set to last until at least April 24. Most businesses are closed with employees working remotely or not working at all. The exceptions include supermarkets, pharmacies, banks, parcel delivery services. The borders are closed to most forms of traffic, except Ukrainians returning by foot or by car. Most domestic transportation is closed or heavily restricted. Estimates range on how deeply the ensuing recession will harm Ukraine. The Kyiv Post talked with entrepreneurs about their daily struggles, asking how the quarantine has affected their ventures and what they are planning to do once it’s lifted.

We want to hear your personal story of survival during this national lockdown. Please contact us at [email protected]

Vasily Grogol, executive director of Bursa Hotel

Vasily Grogol owns and runs the Bursa Hotel in central Kyiv, as well as a co-working space. The hotel includes one restaurant and two bars, as well as a consultant agency. The whole complex employs 150 people.

” We are badly affected. Everything is frozen, restaurants are not working except for delivery, but this is nothing compared to the revenues of the actual restaurant. The occupancy of the hotel fell to 5%. The hotel is still working, however, we have a few rooms per week occupied by locals who want to escape their apartment and spend one night here, to be in a different atmosphere. It helps a bit to support our team because all our gains are dedicated to supporting the team.

“For the co-working space, we were a step ahead of time. We proposed our tenants and partners to freeze all the rents until the end of the quarantine. We don’t want people to pay during these complicated times, and we want them back after everything settles down, that’s why we decided this measure. In return, we ask them to stay home and prohibit them to go to the co-working space.

“There were a bunch of complicated decisions we had to take. It started with closing all the bars and restaurants, which means that everyone is on vacation or helping remotely for a smaller salary. When you are used to working in a dynamic environment, it is complicated to switch.

“In the hospitality industry, you don’t have a lot of reserves, you go with the flow. Honestly, we were not ready for that kind of downturn. We will be able to go on like this for a few months more by optimizing our expenses, but not longer than June or July. I am constantly thinking of the future. I follow data and studies on the topic, especially in China and Italy, but I have no idea what will happen if the quarantine is extended further.

Vasily Grogol, executive director of the Bursa Hotel in Kyiv, speaks to the Kyiv Post on April 15.
Photo by Oleg Petrasiuk

Vasily Grogol, executive director of Kyiv’s Bursa Hotel, speaks with the Kyiv Post on April 15, 2020.
Photo by Oleg Petrasiuk

Vasily Grogol, executive director of the Bursa Hotel in Kyiv, speaks to the Kyiv Post on April 15, 2020.
Photo by Oleg Petrasiuk

Vasily Grogol, executive director of the Bursa Hotel in Kyiv, speaks to the Kyiv Post on April 15, 2020.
Photo by Oleg Petrasiuk

Vasily Grogol, executive director of the Bursa Hotel in Kyiv, speaks to the Kyiv Post on April 15.
Photo by Oleg Petrasiuk

Vasily Grogol, executive director of the Bursa Hotel in Kyiv, speaks to the Kyiv Post on April 15.
Photo by Oleg Petrasiuk

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“For us, the end of the quarantine doesn’t mean coming back to normal times. Taking into account the massive economic downturn, and the fact that 80% of our clientele is from abroad, I do not expect foreign travels to resume soon. It is a big unknown for us.

“The team is what makes me keep going despite the difficulties. We’ve been building it for two years, and for them, we’re gonna stay open and keep going. We still hope to launch projects we already had before the quarantine happened.

“Unfortunately we don’t have any support from the government, and we don’t know why. We have zero support from the government, in terms of decreasing taxation, providing vacations and payments. As landlords and owners, we owe a lot of money to the state, which is unreasonable under quarantine. The government has to stop quarrels between parties and focus on the economy, otherwise, this government is not gonna survive this crisis.

“I’m not an economist nor a politician, so I’ll borrow the words of the American hedge fund manager Ray Dalio: Now is the time for governments to open their reserves and donate to the economy. You have to do it, otherwise, the consequences are going to be even worse. The government needs to step up right now and donate.

“It is also in the Ukrainian business mentality, everyone is tough and used to do everything by himself. We can be tough for a little longer, but we’re gonna have to speak up at one point, because this situation can’t continue for a long time. I am part of a young generation of entrepreneurs, and we are the most hurt right now, because there is no legal basis for us, and we don’t have any influence on the government, nor big reserves.

“To businessmen, I would say it’s time to cut your costs. You need to have close to zero costs. You shouldn’t be sentimental over your beautiful limousine, just cut it all, to survive. Also, protect your people. It’s time to show you can live through the crisis and bring them back with you. It’s not the end of the world. It’s not the first crisis, nor the last. People are creative and we’re gonna invent new ways of doing business.”