Brody Sweeney: How to Save Ireland’s Restaurants

Restaurants have been at the centre of Irish life for many years. An expression of the local culture and the national gift for hospitality, they are where we go to celebrate important milestones, and where we console each other when things go wrong. Alongside families and first dates, restaurants accommodate large groups of friends and intimate reunions. But today many of our great dining rooms are closed, and the industry faces an unprecedented threat to its future.

Over the last few weeks, many people working in the hospitality sector have begun to realise that when lock-down restrictions start to lift, it won’t mean the end of our problems, but rather the real start of them. As one restaurant owner put it to me this week, “I’m more scared of re-opening than I was of closing.”

At the moment, nine out of ten Irish restaurants are closed or effectively closed. While there are some amazing entrepreneurial efforts by individuals, they are at best keeping the lights on, making people feel that at least we are doing something helpful and constructive. Think of the economic and social impact of this mass-closure. Our industry employs in the order of 80,000 workers - 80 to 85 per cent of those men and women are currently furloughed, or out of work.

People in the industry have realised three things. Firstly, overseas tourism has stopped, and depending on how long it takes to get going again, that will have a huge impact on restaurants in tourist towns like Killarney and Galway, never mind bigger cities like Cork and Dublin.

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Secondly, social distancing is here to stay until a vaccine is developed - that might take two years - so even if a restaurant is able to re-open, it will only be able to use say half its seats. And finally, to add to these problems, we have a nervous public. Diners may take some time to get used to the idea that it’s safe to mingle with strangers again outside the home.

When one considers these factors together, it is realistic to expect that business will return slowly, and take two years or more to recover properly. But the cost base that restaurants operate on is, or was, based on being full at least some of the time. The new reality is potentially disastrous for the industry. To put it simply, half-full restaurants are not viable.

Our Government is in a very difficult situation, and while many of us would feel the management of our country has been pretty good through this crisis, the problems are only getting bigger. Every vested interest is coming to Government with their hands out for help with their legitimate interests. Tax revenue has largely dried up, just as the demands on the Exchequer are ballooning at an unprecedented rate.

Along with many other figures in our industry, I have proposed massive state intervention to keep the industry going, while the recovery takes place. This will cost serious money, and many will argue (correctly in normal times) that it’s not the job of the state to prop up private company losses. But here’s the thing. If the Government decides not to intervene, it’s going to have a massive bill anyway. The cost of increased social welfare payments, together with the reduction in VAT and employment taxes, may mean there won’t be much difference in the costs anyway.

Our “Step Down” plan envisages support going to those who need it most (and not to those few restaurants that don’t), and that support steps down and reduces down as business improves. It targets the three big costs of the restaurant business - occupancy costs (including rent, rates and insurance), bank repayments and labour. For example, it envisages that where a restaurant is only doing 50 per cent of it’s normal trade, it would only pay 50 per cent of it’s rent. When business improves to say 75 per cent of it’s normal trade, it would only get 25 per cent of it’s rent supported and so on.

State intervention is not a magic bullet. But it will enable the restaurant industry to keep those jobs, with all the social benefits for our people, our villages, our towns and our cities. Again, this is not an enviable position for decision-makers to be in, but the alternative is frankly unthinkable. That’s why a coalition of restaurateurs is talking to Government this week. Our three-point plan represents a realistic, cost-effective plan to save an industry that was, and could yet be, a much-loved part of the Irish way of life.

Brody Sweeney is founder of Camile and a founding member of the Save Our Restaurants Coalition