Unregulated accommodations should be closed during COVID-19

Much has been discussed in this province at many levels and in many forums regarding the shared economy and the unregulated accommodations that take market share from committed regulated and legal providers. Before COVID-19, many mom-andpop enterprises were struggling to stay afloat in the face of seemingly un-engaged governmental regulators who we are all hoping will soon ante up and enforce the law.

My inn may have one last chance to survive and I’m running out of air fast holding my breath. We’ve heard that there have been high-level talks, meetings, presentations, protestations, on-line discussions and much ballyhoo and consternation, but no action. Nary a peep or a leak indicating action may be forthcoming.

The pandemic crisis has decimated accommodations providers who are the face of our province to visitors from across the globe. The folks who provide welcoming warm spaces, culture and interest, hospitality and acceptance, adventure and information, food, music and drink, those who are our de-facto at-home ambassadors to the world are in peril. The tourism industry must plan and operate under the assumption that the 2020 season is, by and large, lost. The planned “staycation” marketing blitz and expected “fall-bump” from pent-up demand of domestic travel will certainly serve the discounted and unregulated providers well, improving their revenue streams and making it yet more attractive to continue their intrusion on legal market share, and will see us who play by the rules stuck holding the bag again.

Properly regulated legal accommodations providers that have been appropriately barred-up for public safety are under enormous pressures to stay afloat during the pandemic and, due to the nuances of the industry, most are unable to take advantage of the initiatives undertaken by the federal government to protect this billion-dollar revenue generator for the province. It seems they may be more designed to support larger enterprises. A $40,000 interest-free loan is a welcome relief and may help some through the summer months (we’re hoping it helps us), but there will be no revenues to span the cold season. This program is a double-edged sword as it serves to add to debt-load (albeit interest-free) to these micro-enterprises just when they need debt relief; it’s not all bad, but in many cases it’s not good.

The Business Credit Availability Program (BCAP) is the only and last resort that may save some operations by reorganizing their funding models and improving cash flow to get through the lost season and coming winter, however that initiative is showing gaping chasms that us small enterprises fall through, such as gauging viability. The BCAP initiative has a stinging caveat: an enterprise must not have lost money in the last two seasons; that is their benchmark of viability and that statement does not take into account the nuances of the industry.

With at least three seasons of life-and-death struggle to co-exist with burgeoning unregulated operations behind us, the loss of direct European flights and the grounding of the MAX 8 aircraft, the accommodations industry is foundering. There are very few operations that have been able to stretch their accounting and shave the “melting ice cube” that is profit margin enough to successfully stay in the black over the last three seasons. In fact, some fine operations have already been lost largely due to the lack of law enforcement before the pandemic hit.

The industry is desperate for an announcement by the province that will assure creditors that the application for access to credit initiative that is on his or her desk, the last resort for many to survive the pandemic crisis, is supported by the province going forward in the form of strict aggressive and immediate enforcement of the law. Safety and cleanliness inspections, tax registration, liability insurance and all the other industry standards must be met before one more guest’s head hits a pillow. With equality in industry will come strength in industry.

Recent revelations about interloping tourists visiting the island during Level-5 lockdown emergency, endangering themselves and all of us, is a call to action. Where does the province think these adventurers are staying? Patrick Monsigneur Innkeeper, The Claddagh Inn St. Mary’s