(Nord24): Fredriksen is the owner of the accommodation and experience destination Hamn i Senja and chairman of the cluster collaboration Arctic-365, with 105 member companies from the travel industry in Northern Norway.
Despite great activity, a good summer and a high season of winter tourism in the coming months, he fears a series of bankruptcies in northern Norwegian tourism in the future.
The reason is the state-guaranteed loans that the tourism companies had to take out due to the corona pandemic.
– Must relax the requirements
– We, in the same way as the vast majority of other tourism companies, took out corona loans to get liquidity subsidies when we lost half our turnover for two years. It was the way we could get added liquidity to simply cover deficits and operating liquidity in the phase when we did not have regular operations, says Ole-Henning Fredriksen.
He describes that this is the situation for many players.
– These are loans that have no effect in new operating assets or other income-increasing investments, but which were only agreed to cover losses during the period of closure. Repayment of the loan must therefore be taken from regular operations, and not from increased income.
– It’s very loud now. Installment deferment has been granted for up to 36 months. During the second half of this year, installments will begin for the vast majority, says Fredriksen.
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He reacts to the repayment period.
– There is a maximum of three years in which repayments must be made, after the interest-free period. It is intensive.
And fear the consequences.
– Most companies have eaten up their reserves during the pandemic years. It could lead to an avalanche of bankruptcies, if the authorities cannot relax the repayment requirements, which are unreasonably short, says Ole-Henning Fredriksen.
Expenses increase by NOK 211,000 a month
For Hamn i Senja, it will be a tough test to repay everything within three years.
– When the installments start ticking, it will be NOK 211,000 a month for the next 36 months, says Fredriksen.
– How are you?
– In a way, it has to go. We are so lucky that we have reserves in property and other things. But for many, the reserves have been used up through the pandemic years of shutdowns. Most people are now experiencing major ups and downs throughout the year as a result of the markets taking time to rebuild after the pandemic. If those wave valleys become large, then it will be tough for us too, even if we have reserves, he says.
– How does it feel?
– It feels completely unreasonable. These were liquidity loans that were given with tourism companies taking an extra charge and closing their business. If we get the necessary number of years, then we will happily pay back the money, but there must be an installment plan that is correct and adapted to the situation the industry players find themselves in, says Fredriksen.
Will give the banks extended authority
He expects the authorities to step in and contribute to solving the problem.
During the tourism conference Snow23 in Tromsø this week, with over 200 participants from tourism companies and players in Northern Norway, Norway and abroad, Storting representative Ivar B. Prestbakmo (Sp) took part. He promised to take the problem with him.
– It would be tragic if you managed to handle the corona period, then it is the time after that that will overturn things. I am not going to say here and now what is possible, but it is obvious that you should be able to have processes to extend and shift so as not to end things, said Prestbakmo from the stage.
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County council leader Kristina Torbergsen (Ap) pointed out that the industry must have a good dialogue with the ministries about the challenges.
– It was not a grant, but a loan, but it may be that the loan conditions were designed for a slightly different time than we are in now. The conditions have changed. How can we work together now? What is the desired repayment period? What is realistic to achieve, said Torbergsen.
NHO director Kristin Krohn Devold stated during the Snow conference that the banks must be given the authority to extend the repayment period.
It supports the Port of Senja owner.
– It is a very good idea. It is the banks that know the companies best. They are the ones who have to make those assessments. Then it is a relatively simple matter from a political point of view to relax the rules so that it is possible. That makes it easier to get the money back, says Ole-Henning Fredriksen.
He is excited about what happens next.
– It will be interesting to see. Prestbakmo promised to take it further. NHO is working on it, and it is important that the county, through its politicians, who must stand together with the industry, helps press on.
– This is not about not paying back, but about getting a payment scheme that means that you get paid over the years it takes to get through it, without it leading to bankruptcies or the companies not being allowed to develop further , says Fredriksen.
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– Many will not make it
He fears too many of the tourism companies in the north.
– Those who are worse off than us are those who have even greater seasonal fluctuations. There are many who will not make it.
Many companies have large operations in the winter and almost zero in the summer, and vice versa. For them, it is almost impossible to manage such monthly installments over three years. It must be resolved, says the Arctic 365 leader.
– We have 105 companies behind us and know the challenges. This is a current issue that comes up in the face of many people. There has been a sleeping cushion during the interest-free period, but when the installments start to run in full, this situation occurs.
He says this comes on top of interest rate increases, wage increases and price increases.
– We are talking about a price increase of 20 per cent in two years on goods for restaurants alone. We do not have the opportunity to take it out in a price increase in the market. There are additional costs that come on a continuous basis, at the same time that we have to rebuild the markets after being closed down. It is tough for many people and it requires a political solution, says Fredriksen.
– We feel that the banks want to help solve this, but they are dependent on the guarantee scheme from the state being extended.
Record turnover
Hamn i Senja had a turnover record in 2022 with NOK 36.4 million and ended up with a profit of NOK 1.4 million, after a total loss of NOK 2.6 million in 2020 and 2021.
– Last year was a special and difficult year, although it went well in the end. It was the first year after the pandemic that we could aim for year-round operation. The community opened in the first week of February, but even though it opened, the guests were not ready to knock on the door. It takes time to rebuild markets, says Ole-Henning Fredriksen.
– It goes up and down a lot. Most people experience bigger waves than before the pandemic. There will always be fluctuations between seasons, but the valleys are deeper and the peaks higher than before, he says.
The company was set up for growth before the pandemic hit the travel industry.
– The main reason why we had record sales is that we made large investments just before the pandemic hit. We invested NOK 20 million and were supposed to have a large increase in turnover already in 2020, but lost half the turnover due to the closure, says Hamn i Senja owner.
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2023-09-23 10:25:06
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