Financial aid needed for ‘hard-pressed restaurants’

The Restaurants Association of Ireland has been consistently lobbying the Government tirelessly for the past 17 weeks calling on them to put in place an emergency grant aid package to save Irish restaurants.

The last 106 days have had a devastating impact on the hospitality and tourism sector. When we all first shut our doors at the beginning of lockdown, we never anticipated it would last over four months.

During this closure, the bills continued to mount for restaurants, despite the Restaurants Association of Ireland’s tireless campaigning. For many, the reopening on June 29th means operating at a significantly reduced capacity, which will have a detrimental impact on earning potential.

If the Government doesn’t act now, almost 50 per cent of restaurants could shut their doors permanently.

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This will have a devastating impact on Irish businesses and livelihoods and threaten the economic viability of many rural towns and villages.

If the Government fails to act, this lack of support for Irish restaurants could cost the State €2.8 billion over the next 24-month post-Covid-19 period. This cost, as reported by Jim Power Economics, means that there are 100,000 jobs at risk in the sector.

Concerns about the cost of running a restaurant post-Covid-19 continue to rise among our members. These include insurance companies not paying out for business interruption claims, landlords continuing to seek full rents throughout the period of closure, no wage supports for seasonal and new businesses, and utility providers disconnecting services.

For our members who are small independent businesses comprising of restaurants, gastropubs and cafes, surviving on a week-to-week basis, keeping up payments while their doors have been shut is all but impossible. The Government has a responsibility to step in and help these struggling businesses.

Restaurants are a vital component of the hospitality, food services and tourism sectors. It is estimated that the restaurant sector contributes more than €3 billion per annum to the Irish economy and employs more than 125,000 workers. As a crucial part of the Irish economy, it is pertinent that the Government provides supports for the industry’s survival.

We need a “July Stimulus” emergency grant aid package for restaurants, including a 0 per cent VAT rate for food services and restaurants for the period of the crisis and 12 months thereafter, relief on rents and protection for the leaseholder, no banking fees in hospitality until a vaccine is found and continued wage supports.

The supports currently being offered to businesses are not sector-specific and simply do not go far enough.

The recent CSO Business Impact of Covid-19 Survey released on June 23rd stated: “More than three in every five (62.2 per cent) of enterprises in accommodation and food services had ceased trading, either temporarily or permanently, compared to 7.3 per cent of all other services enterprises.”

Hit first and worst

This sector was hit first and worst by the crisis and will take the longest to recover. Whilst we strive to open our doors in the coming days and welcome back our customers, it cannot be denied that recovery will be difficult. Without tourists for the foreseeable future, it will be a hard-fought battle to survive.

This crisis is too severe for the market to take care of itself and therefore many viable businesses will fail because the Government did not see the value in protecting and supporting the businesses and jobs of one of the largest contributing sectors to the Irish economy.

How do you tell a third generation hospitality business in Co Mayo or Killarney, for example, that their business must fail simply because the Government didn't see the value in saving it?

Many restaurant businesses can be saved over the coming months, but only if the supports are properly put in place by the Government to allow them to continue trading. Without the emergency grant aid package, many Irish businesses will close permanently, and the cost to the exchequer will be detrimental. This will be mirrored in the social fabric of our country.

Restaurants breathe life into localities, provide a hub to meet friends and socialise with family. One of the safest environments to enjoy and be entertained is a restaurant.

We can and we will play our part in Ireland’s economic recovery. Some have used the phrase “in this together”, but the Irish proverb Ní neart go cur le chéile (there is no strength without unity) sums up our economic mission.

Restaurants came through the economic crisis of the recession in 2011 and we will also emerge from the current battle with a combination of leadership, social conscience and an ideology of leaving no business behind.

Adrian Cummins is chief executive of The Restaurants Association of Ireland