Hospitality could feel Covid-19 impact for years, say business reps

Representative groups say more needs to be done to assist the hospitality sector. Photo: iStock

The impact of Covid-19 could be felt in the hospitality sector until 2025, business representatives are warning.

2020 and 2021 were described as "written off" by representative groups addressing the Dáil's Committee on Covid-19 response. They called for significant grants, VAT cuts and the extension of wage supports to save jobs and businesses. 

Padraig Cribben of the Vintners Federation of Ireland told the committee that supports can't wait. He emphasised the need for grant aid in the July stimulus package and told the committee that VAT on alcohol sold in pubs should be cut to 9% until the end of the year.

Publicans have concerns about insurance cover too, Mr Cribben said: "If there is an issue on your premises, you're on your own. The only potential defence you have there is in the question of following the guidelines."

When asked when the pub trade could return to 2019 levels, Mr Cribben said: "2020 is absolutely written off, I think 2021 is close enough to being absolutely written off. A lot of the inward bound tourism for 2021 will be planned this year. Getting back to 2019 levels will probably be a minimum of 2023 and possibly 2024."

Tim Fenn of the Irish Hotels Federation estimated that employment will not return to 2019 levels until 2025. He said turnover for 2020 will be down by 74%, while Adrian Cummins of the Restaurants Association of Ireland said that 50% of restaurants face closure without significant state intervention. He told the committee that 75% of landlords have refused to give rent breaks, insurers are hiking premiums which are up for renewal by 15-20% and that utility providers are targeting restaurants for deposits on payments.

Economist, Jim Power, said the 2019 VAT increase to 13.5% was a mistake and it is "essential" to cut this to 0% until the end of 2021 and to cap it at 9% thereafter.

In a later session, representatives from the arts sector told the committee that €2.9 million is being lost each month by arts organisations during the shutdown. With social distancing in place, events and gatherings are simply "not viable", Angela Dorgan of the National Campaign for the Arts, said.

"We don't have a roadmap, like the hoteliers and the vintners, and until we get it, it's going to be difficult," said Shane Dunne of Event Production Industry Covid-19 (EPIC), a recently-formed group representing more than 3,000 businesses in the live events sector.

Mr Dunne said the extension of the wage subsidy and rates and VAT breaks are crucial to keeping people working in the sector: "Without that, there won't be a recovery."