The spread of the coronavirus has put spa facilities in the Karlovy Vary Region in a difficult situation. Elisabeth Spa, which is the last such facility belonging to Karlovy Vary, is no exception. "Currently, we are operating at roughly five percent," says Václav Benedikt, chairman of the board of the municipal joint-stock company.
How were the measures reflected in the running of Elizabeth's Spa?
We gradually started to close operations as government measures came. We started with a pool, a hall, a salt cave, then we couldn't offer services, so we limited the space to self-payers. The only thing left of our operation—I say ours because we still have tenants—is specialized outpatient, medical and rehabilitation care.
How did it affect the employees?
When the biggest restrictions came, like when the pool complex closed completely, a lot of people used to take care of a family member because they have children and schools are closed. Others went on sick leave because they had health problems that they delayed solving and tried to go to work as long as possible. Other employees chose the old leave, others voluntarily took the new one. But of course it is not much, because we are in the first quarter of the year. However, we do not want to deduct a single crown from our employees and would like to reimburse them one hundred percent. Therefore, based on what the government has adopted, we will request compensation for these labor costs.
So does that mean you don't want to lay off?
No, we don't want to.
Elizabeth's Spa mthere were problems even before the coronavirus pandemic. How has the situation changed?
We have a fifth of the staff for the entire complex. However, in order for us to be able to use it in its entirety, it would have to be repaired. It's a vicious cycle and it's all about the money. We had to turn down some clients ourselves, mainly in terms of rehabilitation, and also those who come to us through health insurance companies, which is also a profit-making enterprise. I don't think the issues are about interest. Despite the fact that now we are mostly attacked by foreigners, Russians, living here with us. They still want to buy procedures and wonder why we can't give them to them. Of course, we were in deficit, but in 2019 we managed to increase sales by two million. It's not a super number, but we managed to do it even in the current state in which Elizabeth's Spa is. When I now compared last year's January and February with this year's, we were 350 thousand kroner in sales year-on-year. But March put an end to that.
What did it mean for Elizabeth's spa?
We had to refund money to many organizations and people who had already purchased services and could not get them from us. The sale has ended completely, i.e. the self-payers who feed us. At this point, we have reached a deficit balance, which I did not expect until sometime in June or July. We have already sent the shareholders a request for an additional payment outside of the company's share capital. As I mentioned before, we will try to recover wages, claim losses, but this is all a long-term journey. We need the money now to pay for mandatory expenses and other things.
Is it possible to estimate what the loss of Elizabeth's spa will be?
We move somewhere between one and a half to three million crowns a month. It's hard to summarize at the moment, because we also received returns from VZP, which increased our balance a little. Between the middle of March and the present time, we fell by some two million crowns plus income, which is another maybe a million and a half. Of course it will add up. Our annual turnover is around 50 million, so every month we are falling in the order of millions of crowns.
The city management decided not to sell Elizabeth's baths, but to gradually repair them. Don't you think the pandemic can change this view?
So far I have no feedback that anything has changed. And we also haven't received word on how the city is approaching our request. We know that the situation is now tense and non-standard, we know how much money is left in the budget for investments and that the money is now needed somewhere else entirely. Elizabeth's spa had 4.9 million crowns set aside for repairs, which were carried over from last year. But first we need our own money to start the repairs. So far, however, I have not noticed the pressure that the allocated money would be needed somewhere else.
So do you believe that the repairs will happen this year?
I hope so. It was also part of our request, because we also need operating money to be able to make repairs. We have already started demand management to repair the elevator, in the pool complex, several procedure cabins, which were low-cost and made a lot of money, but there have been several accidents, and we have already made repairs to the air conditioning and automation of the central heating, so that we do not have such heat losses . There were plenty of other things prepared.
Elizabeth's Spa is not the only one affected by measures against the coronavirus. What impact do you think they will have on Karlovy Vary spa industry?
I think it's fatal, because most spas in our country are based on hotels. I see it on such complexes as Pupp, Imperial and others. I can even imagine that traffic there will be completely shut down and conserved for some time. And if you can't accommodate people, you can't even get them into the spa operation. I don't know how the Castle Spa and the Military Spa Institute are doing now, but I think 99 percent of everything is subdued and closed.
Do you think that some players on the Karlovy Vary market will quit because of the pandemic?
One hundred percent. We also receive feedback from some smaller hotels with their own balneo operation, who also send us clients. They turn to us if at least something is still possible for them. For them, the situation is really borderline and they can really quit completely.
How long do you think it will take the spa industry to recover from this crisis - months or years?
The question is how soon the borders will open. We talked with the mayoress about the need to show Karlovy Vary as an exceptional place that is ready to give people mental and physical health after the crisis, and as a place where people can best recover after the pandemic. If we aim for this, I think we have all options open. Maybe even ones that haven't been before. But it is about when the borders will be open so that people can travel to us. Most of our clients are Arabs, then people from Asia and the like.
People involved in the tourism and spa industry talk about the fact that domestic spas will have to focus on Czech clients after the end of the measures. Do you think the Czechs will pull it all off themselves?
I do not think so. The Czech client, especially here, is very thoughtful when it comes to investing in himself. We Czechs are not very used to investing in preventive care. Otherwise, we invest only when something happens, for example an injury, an accident, an operation. Even so, we still prefer the insurance company to pay for it. Since Alžbětina's spa is public, the potential of Czech clients is great, but I don't know if they will buy services from us themselves. From experience, I have to say that the aforementioned Russians who live here are interested in them.
Author: Jana Plechatá
Source: idnes.cz
