The Drinks Industry Group of Ireland–commissioned survey was conducted among 660 pub and restaurant owners across the country and was designed to track sentiment of hospitality businesses following Brexit. Most businesses surveyed were SMEs, with over 50% employing six or fewer. 49% of them reported a decline in tourists over the last year.
75% of business owners are concerned about Brexit and believe that the uncertainty it causes will impact consumer spending here in Ireland, states the survey.
Of those concerned about Brexit, 55% were most concerned that a drop in Sterling makes Ireland more expensive for British tourists while one in six were most concerned about cross-border shopping for cheaper alcohol.
Advising the Government on policy measures to safeguard the industry against Brexit, over 70% said Government should avoid any additional costs to businesses arising from policy decisions and regulation measures, while 72% recommended an excise tax reduction.
Among the survey’s findings:
- 98% of respondents believe that Ireland’s excise tax rate is too high – Ireland has the second-highest excise tax in the EU behind Finland
- 77% of respondents said that business running costs had negatively impacted their business in the past 12 months while almost one-fifth said a decline in tourist numbers had had a negative impact
- 71% of business owners have plans to invest in their premises in the next three years, with almost a third (30%) indicating they would create jobs
- Almost 70% of Irish pubs and restaurants have increased their use of social media in the past three years, while 73% have refurbished their premises
- Almost two-thirds of respondents (65%) rated the UK as the most important tourism market for their business while 13% rated the rest of Europe and one in 10 rated North America as most important.
According to CSO statistics, there’s been a 6.2% decrease in the number of UK tourists visiting Ireland in the period January to July 2017 compared to the same period last year. This has particularly affected the food and drinks industry which relies heavily on British tourism, according to Donall O’Keeffe,DIGI Secretary and Chief Executive of the Licensed Vintners Association.
“Tourists from the UK spend 40% of their budget on food and drink compared to 34% for the average tourist,” he said, “Any decline in UK tourism numbers is a worry and our survey results show that it’s a reality. Action needs to be taken: Ireland’s drinks and hospitality sector is a major employer and contributor to our economy and many of its SMEs have invested in their business in recent years. We must ensure we continue to support these businesses’ ongoing growth and development.
“The Government must act now. Our survey shows that our businesses will be severely affected by Brexit. In this year’s Budget Minister for Finance Paschal Donohoe must prioritise pro-enterprise and pro-growth measures for the drinks and tourism sector, like a reduction in excise tax,” he said.
The DIGI will publish its Brexit report next week. Authored by DCU economist Anthony Foley, The Economic Impact of Brexit on the Drinks and Hospitality Sectors looks at the challenges of Brexit to the drinks and hospitality sector. It puts forward recommendations to safeguard a sector that employs over 92,000 people directly and 210,000 indirectly through 7,193 pubs, 3,161 off-licences, 2,406 restaurants, 983 hotels, 483 wholesalers and 98 producers. These purchase €5.7 billion in materials and services, pay €2.9 billion in wages and deliver €6.4 billion in tourism spend each year, in cities, towns and villages.