The article was published on the Forbes website.
The tourism sector, in particular hotels and restaurants, suffered serious losses due to the war. Some are completely destroyed, others need hundreds of thousands of dollars for repairs. The government offered businesses the opportunity to receive funds for recovery from a special fund. How can businesses use it?
“Because of a shell hit, all the rooms were destroyed,” says the owner of the Kramatorsk Hotel, Valeria Karpenko. There is no exact data on hotels damaged as a result of hostilities in Ukraine. Among those that have been publicly discussed, there are about 12 hotels with almost 1,000 rooms in total, Rostyslav Khoma, head of EY real estate advisory services in Ukraine, told Forbes. Among the large hotels are Kiev Alfavito (229 rooms), Kharkiv (205 rooms), Ukraine in Chernihiv (99 rooms).
About 1,000 catering establishments suffered from the hostilities, Olga Nasonova, founder of the Restaurant Consulting company, adds to Forbes. Partial destruction of the premises of the restaurant, according to her, could cause damage of UAH 100,000-150,000, significant - from UAH 500,000-1 million. Buildings completely destroyed are $100,000 worth of damage, Nasonova says.
Rockets instead of visitors
“A Russian air bomb hit a gas station next to us,” says Sergei Parasiy, co-owner of the “Radio Tbilisi” khinkalni restaurant in the village of Mila on the Zhytomyr highway. “The entire building was damaged by mines.” With borrowed funds, the khinkalni restaurant was restored in a few months.
In Ribas Hotels Group, a hotel in the center of Kherson and one of the glampings of the Mandra Glampings chain were damaged, says founder Artur Lupashko. “20 rooms, three floors were destroyed, all the windows in the building were smashed,” he says. The approximate amount of restoration is $800,000. Lupashko wants to reconstruct the affected hotel objects in tandem with government projects. “They are effective, and the mechanism is clear there,” he said.
What state projects does Lupashko speak about? In March 2022, the Cabinet of Ministers created the Fund for the Restoration of Destroyed Property and Infrastructure. Since mid-December, the government has allowed funds from this fund to be used to rebuild damaged "tourist facilities", including hotels and restaurants.
In addition to the founder of Ribas Hotels Group, four other hotel or restaurant owners interviewed by Forbes have applied and are hoping to receive a refund from the Recovery Fund.
Difficult situation for entrepreneurs in Donetsk and Luhansk regions. Mikhail Razumny invested more than $5.5 million in the opening of the Dolce-Vita Hotel in Svyatogorsk. From an ordinary Soviet camp, it turned into one of the largest hotel and restaurant complexes in the city. When Svyatogorsk came under occupation, the Russians fired on the hotel building. The damage is about $2 million, Razumny says.
At the end of September 2022, a rocket hit the Kramatorsk Hotel, which was one of the largest in the Ukrainian-controlled territory in the Donetsk region. Nearly 3,000 sq. m.
Representatives of the OSCE mission and foreign journalists constantly lived in the hotel, which significantly affected the company's profits, says Valeria Karpenko, the owner of the hotel. More than 1 million UAH of tourist tax was paid per year, she adds.
“So far I can’t find experts who could go to the city and conduct an examination and assess the damage caused by Russian troops,” says Karpenko. She also expects to receive funds from the Recovery Fund.
How the Recovery Fund works
To qualify for assistance, affected business owners must complete an application. It should tell about the form of ownership, the type of right to the object, the damaged area, describe the main damage and the estimated cost of restoring the object. Entrepreneurs whom Forbes spoke with said that there were no problems or difficulties with filing an application.
Although none of them have received funds for restoration. Businesses affected “as a result of hostilities, terrorist acts, sabotage caused by the armed aggression of the Russian Federation against Ukraine” can receive compensation.
Read the continuation at the link on the Forbes website.