40 percent of restaurants will be driven to bankruptcy by end of Ramadan: RAM

Restaurant Association of Maldives (RAM) has stated that several cafes and restaurants will be driven to bankruptcy in the days following the Holy month of Ramadan. The association made the statement while speaking on the challenges faced by the restaurant service industry at the Parliament’s Economic Committee.

RAM member, Hussain Ismail said small and medium businesses are operating at a loss due to the current restrictions implemented in the Greater Male’ Region in response to the COVID-19 pandemic. Several establishments are unable to pay utility bills, rent and staff salaries, he noted.

Hussain said over 40 percent of restaurants will be driven to bankruptcy if the current restrictions are maintained, which would in turn restrict opportunities for young entreprenuers and destroy several home-based businesses. Over 90 percent of businesses in the Greater Male’ Region are small and medium enterprises, and a large percentage include home cooks who prepare food items at home and sell them through local restaurants, said Hussain. Noting that no eases are provided to the catering businesses by utility companies during the current dire situation, businesses are unable to pay bills on time, he added.

Hussain further noted that several concessions were made for the tourism industry, and similar concessions must be made for the restaurant sector for businesses to survive in the current pandemic.

Restaurants were forced to close at 8:30 pm for a while under measures taken by the Health Protection Agency (HPA), although they are now allowed to stay open until 10:30 pm. When questioned by the Economic Committee regarding the decision to restrict service hours of restaurants and cafes’, the Director General of Public Health, Maimoona Aboobakuru had stated that restaurants and cafe’s pose a bigger danger to the public at this time compared to shops. She noted that most customers do not wear masks or practice social distancing when at restaurants.

The President of RAM noted that the peak hours for most restaurants and cafes’ is at night, and that it is important to ensure that such establishments are able to safely continue to serve its customers during peak hours.