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Winter Of Discontent

Updated: Oct 10, 2020

Going from strength to strength together with Skydive Empuriabrava in the past, Marketing Director Juli Sargatal now faces the darker sides of management: total unpredictability combined with the lack of control over a pandemic that stands to impact business until vaccines are found. "This year we have already passed through two winters," Juli describes the regular low season that extended into the 100-day lockdown from March through June. "A third one would make things difficult for the company." Here is the first part of the interview we did with Juli for THE VISION Newsletter 01/2020.

Juli Sargatal, right, together with SDE Operations Director Richie Pym during ISGS 2020.

Together with General Manager Jaume Comas and Operations Director Richie Pym, Juli represented Skydive Empuriabrava (SDE) on the team of the Indoor Skydiving 2020 | First Global Summit (ISGS) organizers and was one of the panelists. As he recalls, COVID-19 did not come up much as a topic in informal discussions held between attendants during breaks and over lunch or dinner. Even though some of the summiteers came from parts of the world where SARS-CoV-2 infections had already taken on epidemic proportions, it still seemed a fairly far-off threat to many.

After SDE had been closed for the traditional winter vacation in January, operations started back up on the very weekend of ISGS – and with glorious conditions from 1 to 4 February. In fact, two of the ISGS panelists took advantage of that to do their first Tandems. Hundreds more did theirs throughout rest of the month, some came from as far as Japan and India. SDE is particularly well known in the latter country, after a Bollywood movie shot at the drop zone and featuring hilarious bachelor party skydiving had turned box office hit and cultural phenomenon a few years ago. An anecdote, yes, but possibly the last one to make us smile for quite a while. Here is the trailer.

The activity at SDE started to drop below the levels of previous years at one point in late February. COVID-19 had finally become the dominant topic that it was not during the summit. On 13 March, a Friday, of course, the Spanish government announced a state of emergency and put the whole country on a lockdown – with some of the most severe restrictions applying to all areas of life.

“It was impossible to predict the full extent of it beforehand. We were selling normally until two weeks earlier, and next thing we had to close. Zero sales and substantial refunds became the new reality. Our biggest worry was the staff. It soon became clear that we could not continue to employ all 50+ ad infinitum. Fortunately, we received help from the government through a temporary unemployment program. We were able to get 48 on this program until we started to reopen. Obviously, there were other financial problems requiring creative cash flow architecture. But we did whatever we had to do to survive. And we continue to do so.”

Unlike the majority of commercial drop zones around the world, SDE is heavily dependent on shareholders who are far removed from the place of business and from where the action takes place. A group of investors from Dubai, UAE, bought up the drop zone less than a decade ago. Together with Skydive Dubai, SDE is now part of a diversified portfolio of several companies around the world owned by this group. Did that cause any problems?

“Not at all. COVID is a global problem. It is not something that affects only Europe or Spain. Our owners have the exact same problems at home and are therefore very understanding.”

One could say that current operations at SDE, even though scaled down significantly, are generating marginally enough to keep things afloat. For the time being!

Where can Juli and the other members of SDE management turn to in order to get at least some support?

“Different entities that are responsible for tourism at all levels of government do a lot for us already. Whether it is the Castelló d’Empúries Town Council, the Costa Brava Tourist Board, the Catalan Tourist Board, they are all stepping up efforts to bring in more people from other parts of Spain and from abroad. They help us to make our product as attractive as possible and to promote it across all channels.

But let’s face it, if the problem does get bigger – if we should have to go on another lockdown, for instance – we will need serious help. As I said, we are wholly unsure whether we could make it through another winter."

One thing comes to mind: VAT, the value added tax, was raised from 8 to 21% overnight back in 2012. SDE took that sitting down and assumed a big part of it by reducing its profit margin – for the benefit of its clients. How about reversing VAT to the old percentage now? It is something that SDE – all Spanish sporting businesses – could pass on to their clients right away.

"For years, there were countries where the value-added taxation for a sporting activity, something which all our products must be considered as, is significantly lower than in Spain. All the way down to an outright exemption.

Just the other day I read an article on the situation in Denmark, where the Customs and Tax Administration confirmed that the general VAT exemption for amateur sports would extend to e-sports as well. I am also aware that a number of European countries are lowering VAT on certain goods and services associated with the gastronomy. In Germany it is the Corona Tax Assistance Act, a one-year stimulus package that brought VAT down from 19 to 7% for the supply of food served and consumed on the spot, i.e. in restaurants, from 1 Juli. Food for thought I would say.”

For the time being, Juli Sargatal has to content himself with the hands-on support skydiving and the sport’s foremost facility are getting from the regional authorities. It is creative and it seems to get the word out. The 12-minute program ‘Living In The Air’ was produced between the Catalan Union of Sports Federation and the regional public broadcaster Catalan Television very recently. It premiered on the sports channel Esport 3.

So much for the first part of the interview. We will post a second part right here in the very near future. Juli will be describing what makes the current operations at SDE so different. It’s more than just social distancing and masks, it is a complex protocol that should help to ensure that the third winter will not happen.

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