Restructuring events
European Restructuring Monitor (ERM)
The restructuring events database contains factsheets with data on large-scale restructuring events reported in the principal national media and company websites in each EU Member State. This database was created in 2002.
Hestia Hotel Group will lay off 190 employees in Estonia, throughout a collective dismissal programme. The reason for the dismissals is the COVID-19 outbreak, resulting in containment measures that led to a collapse in tourism. Four Hotels will closed, two hotels remained opened, one was partially opened as of 1 May 2020. Altogether, the turnover of Hestia decreased by 90-100%. The company made use of the national wage subsidy designed to alleviate the crisis caused by the COVID-19 outbreak, but it is not enough to avoid the dismissals as the recovery of the whole sector will be slow.
The chain has 7 hotels in Estonia and 2 in Latvia. At peak-times, the group employs 500 persons in Estonia and Latvia; the exact figure for Estonia is unknown. Around 40 employees will be made redundant in Latvia as well.
Update, 18.06.2020:On 10 June 2020, it was announced that all 7 hotels in Estonia will reopen in June and the number of employees to be laid off will be considerably reduced down to 35. As the COVID-19 restrictions have been relaxed and the number of tourists is already growing, the Hestia Hotel Group admits their forecast underestimated the actual developments after the crisis. The company admits that they take a risk, but they are hopeful.
Eurofound (2020), Hestia, Closure in Estonia, factsheet number 100584, European Restructuring Monitor. Dublin, https://apps.eurofound.europa.eu/restructuring-events/detail/100584.