Many Hotels In Yogyakarta Go Bankrupt, 7,000 Employees Are Laid Off

Illustration. (Photo: Unsplash)

JAKARTA - Hotels in the DI Yogyakarta province are currently on the verge of bankruptcy, and many have gone out of business due to the pressure of the COVID-19 pandemic. The owners are no longer able to bear the burden of operational costs. Termination of employment is inevitable.

PHRI DI Yogyakarta chairman Deddy Pranowo said the COVID-19 pandemic which has been going on for months has severely hit the country's hotel industry. The hospitality industry in Jogja has been struggling for almost 10 months to survive the uncertainty of COVID-19.

However, he said, hotels are no longer able to survive and pay employee salaries, electricity rates, to BPJS. Thus, choosing to lay off employees to terminate employment (PHK).

"Forced to lay off and have not received severance pay. Due to zero cash flow conditions. The (latest) data certainly do not know, but those who were laid off and layoffs were approximately 5,000 to 7,000 employees," he told VOI, Thursday, February 4. .

Furthermore, said Deddy, there are already 50 hotels and restaurants that are officially closed permanently because they are unable to withstand the onslaught of operating costs every month.

"A total of 50 hotels and restaurants are closed. But mostly non-star hotels and small restaurants.

The reason is that they are no longer strong with their cash flow because the meter (operational costs) is still running while the income is small and even zonk, "he explained.

Apart from the pandemic, said Deddy, government policies, especially regarding the different terms PSBB and PPKM, also affect the potential for tourists to stay at hotels.

This two-period PPKM policy burdens hotels and restaurants to operate. In fact, President Joko Widodo considered that PPKM was not effective in reducing positive cases and that the implementation was inconsistent.

Deddy detailed, when the PPKM in DI Yogyakarta was implemented by the local government, 30 hotels and restaurants stopped operating, aka permanently closed. Then, this policy was extended again for the second period, hotels and restaurants that were closed increased by 20, bringing the total to 50.

Previously, the Central Statistics Agency (BPS) recorded that the number of foreign tourist visits (tourists) throughout 2020 was only 4.02 million visits. However, when compared with the visits of foreign tourists in the previous year, namely 16.11 million visits, this number has dropped by 75.03 percent year on year (yoy).

Head of BPS Suhariyanto said that the drop in the number of foreign tourist visits was inseparable from the outbreak of the COVID-19 pandemic. The pandemic has had a devastating impact on the tourism sector and of course also on its supporting sectors.

"So in our opinion, it seems that the tourism sector will still face tough challenges as long as the pandemic is not under control. That's why we will rely on domestic tourists," he said, in a virtual press conference, Monday, February 1.

According to Suhariyanto, the achievement of the number of foreign tourist visits in 2020 is also inseparable from the number of foreign tourist visits in December. Based on BPS data, the number of foreign tourists visiting in December was 164,088 visits.