The peak body for hotels in Australia says social distancing restrictions will not be sustainable for hotels to maintain, as pubs face a growing "debt cliff" due to the coronavirus shutdown.
In an "exit strategy" presented to the federal government, the Australian Hotels Association said its 5000 members had been forced to stand down at least 200,000 workers since social distancing restrictions came into effect on March 23.
Claims the industry was in "hibernation" due to the introduction of the JobKeeper payment were "not realistic" because operators were still paying rates, land tax, corporate tax and other fixed overheads, their submission said.
Hotels were facing a "debt cliff" of $15,000 to $300,000 accumulating per month as a result.
"The longer hotels are shut down, the more likely a business will not recover and jobs will be permanently lost," the submission said.
The group has proposed a staged "exit strategy" for lockdown, with limited trading to resume in early June.
Stage one would include social distancing principles of 1.5 metres and one person per four square metres, and encouraging patrons to use the COVIDsafe app.
However the association warned these social distancing measures were unsustainable in the long term.
"Unfortunately, the existing social distance rules of 1.5 metre and one person four square metres equate to about 25 per cent capacity and are not sustainable for many hotels, particularly regional and country premises," the submission said.
"For many, a 25 per cent capacity limit would not even cover fixed costs for a venue e.g. electricity usage charges (A/C, refrigeration), workers compensation, broadcast licence fees, music licensing etc."
This was even more so for smaller venues.
"Advice from members is the tougher the capacity limit, the harder it is for smaller venues to open. Generally, larger venues with more space will find it easier to spread patrons out and re-open earlier. There is a very strong view that the current 'one person per four square metres' rule severely limits the capacity of many venues to cover fixed costs.
"A 25 per cent capacity is only sustainable for the very short term. For the medium term, the [Australian Hotels Association] believes a capacity limit of 50 per cent will enable the majority of venues to trade in a sustainable way."
It comes as National Cabinet is set to decide on Friday which businesses will be allowed to re-open first.
Prime Minister Scott Morrison indicated on Tuesday restaurants and cafes would be among the first businesses to re-open.
"When restaurants and cafes are closed they're not buying from the producers like they were before, and so there is a compounding of the effect," Mr Morrison said.
"So keeping those places closed - and there have been very good reasons for having them closed - but the longer that goes on, it is not just the waiter and the chef that is affected, it is the food producer, it is the supply chain."
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