€45,000-a-month maintenance for a closed hotel

BarcelonaThe neon lights in the reception of Hotel Lloret stay on night and day. On the door, a sign welcomes you in Catalan and three other languages. However, not a client has set foot in the hotel since March. The hotel has been closed since because of the pandemic, and it has also become a financial black hole: its maintenance alone costs €45,000 a month, according to its owner, Armand Vives, who no longer knows where to find the money. He is sure about one thing, however: the hotel must go on, whatever it takes. It is one of the oldest in Barcelona.

Hotel Lloret is near the top of the Ramblas, close to Plaça Catalunya. Anybody who has wandered around the centre of Barcelona will undoubtedly have walked past it. An old, four-storey building, it stands out for its iron railings and wooden shutters. The Lloret family – hence the name – inaugurated it in 1926, and it has had no less than president Francesc Macià amongst its guests. Since 1988, it has belonged to Armand Vives. “It is a one-star hotel, but it is decent and friendly”, he sums up. Vives explains that the seventy rooms were always booked. By tourists, obviously. Hence the problem: there are no tourists to be seen in Barcelona. However, the hotel continues to suck up vast amounts of money.

Fixed costs

“Rent, water bill, electricity bill, gas bill, telephone bill, insurance premium…” The list goes on. To this, Vives adds the government loan he took out in 2016 to add a floor to the building and which he now has to pay back. All in all, €45,000 a month. The government loan’s instalments are already €8,000 month, but then the electricity bill is another €1,500. And that is despite the fact their electricity consumption has plummeted.

The lights in the reception are always on, though. Vives explains there is no switch to turn them off: “Nobody thought we’d ever need one; the reception is always open, 24/7”. You can spot some other lights in the building, too. Three maintenance workers have moved in. “They had personal problems and asked to stay as a temporary measure, and they have now been here for eight months” Vives explains. Both sides benefit: they have a place to stay, and their presence might help deter thieves or squatters. Nevertheless, Vives has barricaded the door with beams.

Vives applied for government loans in order to be able to keep the business going. In total, he received half a million euros. But the money has run out. Maintenance now costs €45,000 a month, but in March, April and May it was a great deal more. “I had outstanding bills to pay from February and March, when the hotel was still working. Only the laundry bill is already €10,000” he explains. There are no more grants or loans he can apply for, and neither can he offer his hotel for coronavirus patients – though he would love to – nor turn the rooms into offices for those working remotely, like other hotels have done. “Luxury hotels can do that, but we can’t. Who would want to come to a one-star hotel?”

The only option that remains is to use his own resources or hope for a miracle return of the tourists. Vives says he tried to reopen the hotel in July. In fact, everything is ready: plates, cups and cutlery are all prepped. There are hydroalcoholic gel dispensers and a protective screen at the front desk: the full anti-covid measures. “We had three or four bookings a day, but every time there was some bad news about the pandemic they were all cancelled”, he laments. The numbers just didn’t add up.

His hope now is that he will be able to open in spring. Yet he is unsure whether he will be able to keep on all twenty staff, who are currently on furlough. “The city centre is going to be ground zero”, Vives predicts. The problem is not just his hotel, but all of the hotels and the whole neighbourhood, he claims. “We used to live off tourism, so what? So do many other cities around the world.”