Welcome to your February newsletter,
January has been a difficult time for our industry, wet and gloomy weather has made things that bit more difficult. The good news is today is the first day of spring and we have brighter days ahead. I would like to open this newsletter with a big congratulations to Ahmet Dede who was awarded a Michelin star and also to Loam, Kai and Inis Meain who received the green star for highlighting sustainability. Congratulations to all and also those that have retained their prestigious accolades and to those who received a Bib de Gourmand all huge achievements.
There has been much activity throughout January that will have a significant impact on the future of our sector. Starting with insurance, there was a positive result for the hospitality industry in the UK after the supreme court ruled that insurance companies must pay out for business interruption due to the pandemic. This is a positive result as we await a test case on Friday between FBD and four pubs which will determine the faith of many businesses across the country.
This morning Failte Ireland conducted their annual report. Initiatives such as an outdoor dining grant along with an urban animation grant were all discussed. Event caterers seem to be excluded from the €55 million grant scheme as they did not get a mention. An extension of the 9% vat rate until 2025 was mentioned. We will know over the coming weeks as to the exact detail of each of these commitments and how much of an impact they will have on our industry. As sectors begin the roll out of reopening which looks ever likely that it will be extended beyond March 5th. I still suspect hospitality will be left behind again. By the time this happens there should be a full re evaluation as to how the state is going to ensure hospitality businesses can stay afloat. The CRSS scheme should be doubled and the 5k cap removed and reassessed. Non fixed premises businesses such as event caterers and wedding planners event etc are still excluded from the CRSS scheme. These businesses should be included and reimbursed for the weeks that they missed out on the grant. Other businesses that are exempt are new business that are not more than 6 months in operation. They have made the brave decision of opening during a pandemic with a commitment to creating employment. Businesses like this are part of the recovery of our sector and should be supported also. Backing brave comes to mind.
Our CEO Adrian Cummins engaged with Tanaiste Leo Varadkar & Minister for Finance Paschal Donohoe & Minister Micheal McGrath along with state bodies regarding banking issues that are affecting our industry. Last year the Strategic Banking Corporation unveiled their covid 19 credit guarantee scheme which should in essence encourage lenders to do business knowing there is a safety net which totally reduces risk. I do not believe our banks are committing to small business. Any moratoriums that are currently in place may negatively affect your credit rating which should not be the case. Banks also see loan applicants that are employed by businesses availing of the wage subsidy scheme as unfavourable when it comes to mortgages. This has a negative impact on retaining staff seeking a mortgage and also bringing new blood into hospitality. If the sector is seen as unsecure employment we do not have a chance at enticing skilled individuals into our businesses. I have already seen staff change career because of failed mortgage applications. Not because the wages were not high enough but because of the perception of their employment. I was delighted to see this level of engagement from the RAI and state leaders on banking.
My opinion is that the entire system when it comes to small business banking should be overhauled. There is not enough competition out there and with the ECB interest rate, the state is borrowing money at 0%. We need a state bank that really does back brave. David McWilliams suggested the state take over AIB. They currently own 70% of the bank and could purchase the other 30% at €1.50 per share. It was sold at €4 and so they would make a massive profit. The business community would have a bank that they could rely on and it would breed more competition. Win, win, for government and small business.
Although the 1st quarter is a write off, many are busy with take away, deliveries, meal kits and all kinds of innovative ideas that are keeping people employed and also keeping the link with the consumer. It is good to keep busy and we also have a responsibility to keep the minds active of those that we employ. There are many training courses available through the Restaurant and Hospitalty Skillet that are very beneficial and an ideal way to keep busy. I would encourage those to share the courses with their staff and try upskill during this time. More details can be found below.
The Hospitality and Tourism expo will be taking place on the 13th of April, a must attend webinar. It is a free one-day virtual event with a dedicated stream for students and a focus on the education and upskilling of the hospitality and tourism sectors.
I would like to wish you the very best. As I said at the start of the newsletter, this is the first day of spring and there are brighter days ahead.
Mark McGowan -President