Provider of data, technology and insights related to risk, governance and growth Kroll has carried out a survey supported by the Restaurants Association of Ireland (RAI) about Ireland's hospitality sector.
Kroll surveyed over 150 businesses across different areas of the hospitality industry and found overwhelmingly that respondents agree that COVID-19 business support is still necessary to return to pre-COVID-19 pandemic profits, and manage increased operational costs. Withdrawing support as early as this summer will have a negative impact on short-term recovery, according to the survey, with 96% of restaurant and hospitality business owners feeling that the reduced 9% VAT rate should be retained.
The survey also examined the sentiment from hospitality managers about the current workforce. It found that 61% of restaurant owners believed that staffing would pose the biggest challenge in the future, alongside more than 80% of respondents saying that wages will need to increase to retain employees. Nonetheless, 66% said that they believed their businesses to be economically viable since the dismantling of the restrictions put in place to stop the spread of COVID-19 throughout 2020 and 2021.
Additional key findings from Kroll's survey include:
- 74% of survey respondents felt that government support for the restaurant sector since March 2020 has been sufficient;
- 86% of hospitality managers said that their businesses would not have survived the pandemic without government support;
- and 49% of business owners felt that they did not receive adequate support from their bank or finance provider.
Statements By Managing Director Of Restructuring At Kroll Ireland
Managing director of restructuring at Kroll Ireland Declan Taite stated, "The restaurant and hospitality sector is optimistic on growth, but some may need to consider restructuring or rightsizing their business to reach pre-COVID profitability. The real lasting impact from the pandemic will be felt when government support is completely withdrawn over the next few weeks. It would seem that reverting back to a higher VAT rate of 13.5%, less than a year after a lower rate was introduced to help boost the sector, will only serve to put undue pressure on an industry that was one of the hardest hit by restrictions during the pandemic."
Taite continued, "Our clients in the hospitality sector across hotels, restaurants, cafes, gastropubs and bars have chosen to restructure their businesses through both formal and informal processes. Now that the hospitality sector is reopening, businesses are looking for support to strategically navigate the impacts of the COVID-19 pandemic."
Statement By RAI CEO
RAI CEO Adrian Cummins stated, "There's no question that staffing is now the biggest issue for our sector, with the vast majority of restaurant and hospitality businesses having to increase wages to retain staff. We now have six weeks to recruit to save the Irish summer and retain our standards."
© 2022 Hospitality Ireland – your source for the latest industry news. Article by Dave Simpson. Click subscribe to sign up for the Hospitality Ireland print edition.