A hard pill to swallow for hospitality entrepreneurs

Iris van den Broek

The government quickly promised emergency support packages, including to hospitality entrepreneurs, to ensure that they could survive the crisis. Did these packages lead to more or less equality? That is what René Bakker and his team are researching.

What exactly are you researching?

"We look at how the corona crisis is experienced differently by different groups of entrepreneurs and businesses. To start with, we look at the hotel and catering industry. There have been emergency packages for entrepreneurs, in order to qualify you had to meet certain criteria. There are entrepreneurs who were not eligible and entrepreneurs who were eligible - but of the latter group, not everyone actually received the support or applied for it. Our hypothesis is that entrepreneurs with an immigration background suffered more from this crisis, because they applied for or received less emergency support.

The hospitality industry is an interesting sector, because it has been closed for a long time; a lot of support has been requested. And we have many immigrant hospitality entrepreneurs in the Netherlands."

And? Is the hypothesis correct?

"We can't say that yet, we're still analysing the data. If it is true that this group received less emergency aid, it is then interesting to look at why. Did they apply for it less? Or later? We know from the literature that being an immigrant entrepreneur is more difficult than being an entrepreneur without an immigration background. So we want to look at whether the emergency support did lead to an inclusive outcome as intended."

Why is that important?

"We still have the benefits affair fresh in our minds. The purpose of the emergency aid was to give everyone equal opportunities. If certain groups made less use of the emergency aid, and therefore also lagged behind competitors who did use it, the emergency aid would undesirably widen differences instead of narrowing them."

"In the light of a possible next crisis, we want to create an equal landscape, where everyone can benefit equally from measures, where everyone has equal opportunities".

René Bakker

Are you also looking at how hospitality companies will emerge from the crisis?

"Yes, but we need to get that data and analyse it in real time. Another discussion is whether the emergency aid has created any zombie companies: companies that are standing up now but will collapse when the aid stops. To be able to say anything about this, we need to be further back in time."

Are you worried about hospitality businesses?

"From a historical perspective, this situation is unprecedented. Often performance is related to how a business operates. Now, businesses are totally independent of what clever or unique things they come up with; they are simply not allowed to open. In economic terms, this situation is a tremendously bitter pill for hospitality entrepreneurs. The question is to what extent companies can still make up for the loss in turnover. I can't imagine that there won't be any businesses that go under.

Compared to other countries, however, the Netherlands has set up prompt and generous emergency aid. What we, as economists, have to look at carefully is how effective those packages have been, and whether people or groups have not fallen by the wayside. The Dutch economy runs mainly on small businesses. With a view to a possible next crisis - whether a pandemic or an economic crisis - we would prefer to see an even landscape, where everyone benefits equally from measures, where everyone gets equal opportunities."

Associate professor

dr. René Bakker

More information

Erasmus University Rotterdam is proud of the impact researchers have in corona time. Read more about the corona-related research of René Bakker.