In rural areas and in major conurbations such as Dublin, the potential fall-off in tourism numbers is likely to have extremely negative consequences for levels of trade for some of the more rural pubs which have been benefitting from rising numbers of overseas and domestic tourists coming into their towns and villages. The VFI has claimed that the cancellation of the St Patrick’s Day parades across the country will cost publicans up to €100 million.
Calls have also been made for the government to defer VAT payment for the first half of the year, to reduce the hospitality VAT rate for business back to 9% and for it to provide interest-free loans to businesses under significant cashflow pressure as well as a waiving of local authority rates and a halving of Employer PRSI to support employers.
RAI – experiencing 80% corporate booking cancellations
The Restaurants Association of Ireland is hearing from members that they’re experiencing 80% corporate booking cancellations due to COVID-19, reports RAI Chief Executive Adrian Cummins, “The cancellation of one of the biggest tourism draws of the year is a further blow to many restaurant businesses and could be the straw that breaks the camel’s back. While our number one priority is the safety of our customers and the public, we need the government to step up and step in and help Irish restaurants survive.”
It’s also reported that some restaurants around the border region or those heavily dependent on tourism had recorded their worst January and February in 10 years.
In Dublin licensed trade anecdotal feedback suggests that bookings for the end of March & for April are being heavily cancelled.
LVA – decision to cancel “a responsible and rational approach”
The cancellation of the St Patrick’s Day Festival in Dublin caused the LVA to comment, “Traditionally, the St Patrick’s Festival is a significant trading period for the hospitality sector in Dublin, attracting hundreds of thousands of visitors to the city. Given the public health concerns, the decision to cancel the parade is a responsible and rational approach.
“While all hospitality business in the capital will be impacted, health and safety must come first. Our hope is that by taking concrete action now the spread of the coronavirus will be contained and trading conditions will return to normal as quickly as possible”.
Of course the loss of the Six Nations rugby fixtures in Dublin will also be huge for the pub trade in the capital.
But Cheltenham has gone ahead and that would normally be a big event for pubs. It remains to be seen whether customers will stay away or turn up to watch the proceedings.
However publicans recognise that public health comes first and they’re all following the advice and guidance of the HSE on this, stated LVA Chief Executive Donall O’Keeffe who told Drinks Industry Ireland, “Of course it’s dominating public & media attention as a fast-moving story but it’s potential to do considerable damage to the economy is obvious.
“What happens next and what happens to the hospitality industry as a result all hinges on how many cases we get and how quickly it spreads.”
But there are also direct consequences of COVID-19 for pubs as a business entity in itself and the LVA has developed a fairly comprehensive Guidance pack specifically for its members on the Corona virus.
This covers off relevant areas for publicans including contingency planning for business interruption, internal and crisis communications, employers’ rights and responsibilities, employees’ rights and responsibilities, business continuity and sample employee policies that cover hygiene, sick leave etc.
People particularly want to know how they manage staff situations, so having a policy on this has become critical.
IHF reports increasing levels of cancellations
COVID-19 poses enormous challenges for the hotels sector and the wider economy, agreed Irish Hotels President Elaina Fitzgerald Kane, “Our members are already reporting increased levels of Coronavirus-related cancellations and we expect they will increase further with the cancellation of St Patrick’s Day events. The Government must mitigate the impact on the tourism industry throughout the country.
“The Irish Hotels Federation is calling for the immediate implementation of measures that will assist with cashflow for those businesses facing short term problems as well as a reduction in the rates of VAT, PAYE and PRSI and arrangements for the deferral of these payments. We also call on the Government to waive local authority rates until this crisis is over, together with the introduction of direct business supports including finance and marketing assistance.
“Tourism is one of Ireland’s largest indigenous industries,” she continued, “It generates over €9 billion annually and supports over 260,000 jobs across every county, 70% of which are outside Dublin.”
VFI – “an unprecedented challenge”
The VFI too commented on the “unprecedented challenge facing the hospitality sector”
While the cancellation of St Patrick’s Day parades nationwide is a blow to the hospitality sector, it stated, public health is of paramount importance and publicans fully support the government’s decision.
“We need to work together as a society to combat the coronavirus and if the situation in Italy is replicated here difficult decisions will have to be made over the coming weeks,” said VFI Chief Executive Padraig Cribben, “We are now entering a period of prolonged uncertainty, which will have profound consequences for the hospitality sector. The government has announced a support package for businesses that, while welcome, requires urgent clarity.
“Pubs can’t recoup a lost week or month’s trading. While a €200m liquidity fund sounds impressive what does it mean for the small business owner?
“The Minister for Finance Paschal Donohoe has stated he is ‘aware’ of what the hospitality sector is facing over the coming weeks. The VFI is urging him to announce a package of measures that will instil confidence in the sector ahead of this unprecedented challenge. A suspension of VAT payments, a reduction in the hospitality VAT rate and deferment of commercial rates for the remainder of 2020 are all options that should be examined,” he concluded.
The VFI is monitoring the situation and sent a briefing document to members recently in regard to access to information on staffing etc.
The Federation will be looking to update this as and when information becomes available.
It has been looking at countries like Italy where a lockdown is now in place nationwide and where it’s estimated that the country could lose some €7.6 billion from Covid-19.
“Public health comes first here and everything flows from that,” VFI spokesman Brian Foley told Drinks Industry Ireland, “We’re certainly talking with vested interests such as suppliers to see what their plans are.”
“The situation is fluid ‘though we’ve not received too many calls from members – but some are seeking supplies of hand gel.
“Pubs and clubs and restaurants are like the canary in the coal mine where one will first see the scale of this.”