A new report on the Irish hospitality sector has recommended supporting 75pc of the wages of workers in the sector as well as providing working capital to help the industry restart itself post-Covid-19.
The sector is a key component of the Irish economy worth up to €7.6bn annually, representing up to 2.3pc of GDP, and employing 180,000 people, notably across all regions.While final data is not yet available, approximately 100,000 people may have already lost their jobs in this sector, with countless more indirectly affected.
A new report by PwC entitled ‘Covid-19 and the Irish Hospitality Sector – Impact and Options’ published today (23 March) helps identify key proposals to protect employment and businesses across the country.
“Hospitality is core to our DNA and goes to the heart of brand Ireland. Without major step-in supports, we will see significant human, economic and societal stress”
The report identifies two step-change actions with most effect:
Firstly, to step-in and keep employees in the sector in their jobs – covering 75pc of the net take home pay of employees in the sector, having a net additional cost to the exchequer of €2.4m per week when compared to the €203/week unemployment payment, and
Secondly, to provide an interest free loan mechanism to provide working capital for the industry to restart itself post Covid-19. The report reveals that, unsupported, a business in Ireland’s hospitality sector could take up to 62 weeks to recover from the onset of Covid19
Land of welcomes
“These proposals are aimed at being constructive and supportive to the efforts Government is already seeking to provide at this vulnerable time,” Owen McFeely, director, PwC Ireland Retail & Consumer Practice.
“Any plan for income support could ease some of the pressure of both staff and owners/managers and speed up the return to normalcy once bans are lifted”
“Hospitality is core to our DNA and goes to the heart of brand Ireland. Without major step-in supports, we will see significant human, economic and societal stress, particularly for areas outside the Dublin region where hospitality is often the cornerstone of local communities.
“We recognise that this is a significant action over and above current supports, however bold steps are necessary now to ensure that we do not have a delayed recovery. To avoid or alleviate the damage of another recession, it is simply essential that employees are ready to go back to work when this situation eases. This isn’t just about the hospitality industry, the options and suggested framework identified in this report can easily be applied to other sectors and industries,” McFeely said.
This PwC report argues that bold and early action will ultimately be positive and impactful on both our economy and wider society.
John Dillon, PwC Ireland Retail & Consumer Practice Lead, said: “A subvention-based approach as proposed allows businesses to remain connected with their employees. This will be critical to enabling the sector to mobilise rapidly and transition to post-Covid realities once current social barriers are lifted. It ‘flattens the curve’ economically.
“The hospitality sector, supported by Ireland’s food industry, has spent many years developing Ireland’s image and reputation as a unique destination for food tourism. Failure to support key players including Restaurants, Hotels and Pubs and the wider ecosystem including local farmers and producers could do irreparable damage to the long term future of the industry.”
The head of Hospitality Sector at Bank of Ireland Gerardo Larios Rizo said the proposals have merit.
“Hospitality businesses across the country have been struggling to keep their staff in employment during these challenging times. Any plan for income support could ease some of the pressure of both staff and owners/managers and speed up the return to normalcy once bans are lifted. At Bank of Ireland we are continuously monitoring the situation and are offering a range of options to those impacted by the sector,” he said.
Main image: Marker Hotel Dublin via Shutterstock
Written by John Kennedy (email@example.com)
Published: 23 March, 2020