Car rental and events companies could be among the casualties of COVID-19 if current conditions prevail, with business down by up to 95 per cent last year for these struggling industries.
They are among the 13 per cent of small and medium enterprises that said in a recent Malta Chamber of SMEs survey that they would not last beyond three months.
The events industry was “sidelined” during the pandemic, and risks being eradicated, according to an operator who has had a year of “no work”, while at one car rental company, revenues fell to a “mere trickle”.
Business at Avis Rent-a-Car was last year down by 90 to 95 per cent on 2019 figures, with just a brief respite in July and August as levels picked up to only 25 per cent of the previous year, said its director and CEO Jason Aquilina.
Event Planner Co. Ltd has remained afloat thanks only to a flexible workforce that has been ready to do side jobs and unrelated work.
“If you want us to paint your wall today, we will,” said its director James Cassar, who has not taken home a wage for a whole year and is feeling the pinch.
To quantify the company’s losses, he explained that the worst-case scenario of a 55-per-cent decrease in turnover over 2019, established in the new government wage supplement scheme, would have been “brilliant”.
“There is not even a bracket for us,” Cassar continued, pointing to 80 to 90 per cent losses in turnover for the industry in general.
His line of work would not survive for much longer, although the eight-year-old company could persist by doing what it was not set up to do and acquiring another skill set.
James Cassar has not taken home a wage for a whole year and is feeling the pinch
The situation was even more “shocking” because it follows three good years, where profits were pumped back into the company.
Meanwhile, long-standing Avis, present in Malta since 1967, would have to continue restructuring to ensure its viability if things do not change in the next three months.
COVID-19 has brought the curtain down on events. Inset: James Cassar, director of Event Planner Co. Ltd. Photos: James CassarA matter of uncertainty
Cassar went from growing staff, increasing wages and dishing out bonuses to deleting an advert for vacancies in March.
The government supplement was essential, but at a point, key employees had to move on – to unrelated industries that, at least, offered a guaranteed job in a time of uncertainty.
The company moved from 15 to 11 staff.
“I was abroad dealing with foreign clients this time last year and noticed cancellations. Suddenly, all events for 2020 were postponed. It was like an avalanche. Eventually, they were cancelled for 2021 too.
“We have been at a complete standstill since. But worst of all, we are not in the limelight. People have forgotten about us and have the wrong perception of the industry. Just because it is associated with fun, it is not a hobby. This is our bread and butter.
“I love what I do, but I also live off it and so do my staff,” Cassar stressed. “Luckily, I have no family yet, and have delayed buying my future family home.”
Future problems and prospects
He is concerned about a post-COVID mentality that is resistant to events, with a push toward a virtual version. Companies could begin considering face-to-face networking an extra expense, said Cassar, who is also a visiting events lecturer at the University of Malta.
If the situation does not return to normal soon, companies’ budgets for 2021 would be finalised. So even if it eventually improves, no money would be allocated.
Outlining a strategy for the way forward, Cassar called on authorities to present a best- and worst-case scenario so businesses can plan and establish targets.
Following that, the “taboo” surrounding events needs to be reversed. Companies wanting to invest in employee well-being should be incentivised through schemes and tax rebates to spend money on team-building events, for example.
The next step would be to market Malta abroad as a safe destination, given that international events need a lead time of over a year.
Regarding the car rental industry, Aquilina said it was able to hold on to its 70 employees during the pandemic thanks also to the government measures.
Avis Rent-a-Car has applied for every scheme possible and has also sought assistance in terms of registration tax, for example on vehicles ordered and delivered in 2020 but not deployed due to the turndown in business, as well as fees related to the garaging of unused cars.
He remains hopeful that there will be a “huge pent-up demand for travel globally”. He is optimistic that the bounce-back will be swifter than expected because of good progress in EU-wide vaccination programmes.
The primary solution for these struggling businesses, it seems, is consumer confidence to travel.