“Harrowing” outlook for pubs & hospitality
While around two in three Dublin pubs have re-opened this week more than 60% of pubs outside Dublin remain closed. For those pubs that have, or intend to, re-open, Government guidelines will mean a significant change in how they operate and how consumers experience the Irish pub.
Reduced capacity – with some operating at 50% capacity or less with time-limits on customer visits – and zero tourism will leave many pubs vulnerable, struggling to meet costs and trading at a loss.
Indeed the three drinks organisations have described the outlook for pubs and hospitality businesses for 2020 and 2021 as “harrowing”.
Over 70% of Ireland’s tourism revenue comes from overseas visitors – currently lost with the country effectively closed to tourists.
“This is exacerbating the situation for our drinks and hospitality industry which rely on tourism for custom in many parts of the country,” state the three drinks organisations, “Equally, our pubs drive and promote our tourism product as one of the most popular experiences for tourists, so need to be protected.”
The reduction in the VAT rate on alcohol would provide immediate support for the re-opening of pubs.
The call comes following comments from Fáilte Ireland’s Chief Executive Paul Kelly who said that the pandemic’s impact on tourism has been “catastrophic” and “dwarfs all previous crises” at a recent meeting of the Covid Committee.
An important community hub
According to DCU Economist Anthony Foley in his detailed report on the VAT rate and its effect on on-trade alcohol, due to be published in the coming days, a reduction to 9% in the hospitality VAT rate and extending it to apply to alcohol sales in the on-trade until the end of the year would cost €143 million.
The latest campaign calls on the new Government to protect these businesses and it calls on the public to get behind this campaign to protect pubs throughout the country at #NewGovProtectOurPubs.
“The financial burden on pubs as they adapt to the new measures of Social Distancing, reduced capacity, expenditure on perspex screens and PPE, is significant.,” commented VFI Chief Executive Padraig Cribben, “For many, it will be too much and they won’t be in a position to re-open on 20 July.
“Protect our Pubs is a reminder to us all of the value of our local pub and a direct call to the new Government to support them to get back on their feet.”
His sentiments were echoed by LVA Chief Executive Donall O’Keeffe, who added, “As our sector re-opens over the coming months, it will do so under new and unique circumstances, completely at odds with what it previously meant to enjoy our culture and heritage in the pub. We have had to completely change our business model and the VAT model should change to reflect our new reality. Public support for our campaign to protect Ireland’s pubs is crucial to ensure that the Government understands the gravity of the situation our industry is in.”
And Drinks Ireland Director Patricia Callan pointed out that this is in line with the Minister for Finance’s ambition for measures in the July stimulus programme to have an immediate impact and effect in 2020.