Welcome to the Presidents report for October,
As the Budget approaches, the team in RAI headquarters have been extremely busy preparing our Pre-Budget submission. This document contains a targeted package of suggested supports that will ensure the survival of many jobs and businesses for the coming year. It is important that we continue to engage on a local level and explain to our TDs the importance of these asks. Our industry has been the longest and the hardest hit by the pandemic. Pre pandemic business levels will not return for at least another 18 months. Continued wage supports will be a good investment when international tourism is back in full flow and the sector fully recovers. The EWSS has been an essential component in getting businesses back on track. It is hard to think how we would have survived the last 18 months without this vital support and so we are seeking an extension of the EWSS for 2022.
As soon as travel restrictions came into effect in March 2020, the tourism industry was shut down and the sector went into complete hibernation. Tourism development paused and all plans for various regions came to a halt. To reignite Ireland Inc, a significant investment will be required. We are seeking an increase in the national tourism budget from €186 million to €300 million. This will complete many projects and encourage international visitors to travel to Ireland by doubling the marketing budget, it will assist with increasing business continuity funding and essential business supports. This ask is consistent with the Governments own taskforce who have already called for a substantial increase in the budget to ensure recovery in the €9 billion a year sector and the restaurant industry is an essential component in our overall tourism product.
Currently there are 11 EU member states that have a lower VAT rate for hospitality than our current reduced rate of VAT, Our tourism industry generates €9.2 billion every year and employs 265k people, it is important the 9% remains until at least 2025 and if possible, reduce it in line with other EU member states.
The largest challenge our industry currently faces is the skills shortage which has gone beyond crisis point. There are now approximately 40,000 vacant positions in the sector. Many businesses have reduced opening times to ensure staff get adequate time off, the majority of restaurants struggle to operate below a 40% labour cost and all we have seen with these skills shortages is inflation in wages. This is due to increased demand and the crutch holding it all together that is the EWSS support. My fear is that when this support is taken away the industry will crumble. Hospitality skills and recruitment is at the top of the Restaurants Association of Ireland’s agenda. Work permits and visas, apprenticeships and the establishment of a national tourism and hospitality training authority is a priority, and we are doing our very best to make this a reality. We have already called for a restaurant and hospitality forum to be established like the retail consultation forum that contributes to decisions that help the retail sector.
Looking past the Budget, October 22nd marks the day that all of our restrictions will be scrapped other than the wearing of masks indoors which means we will have the ability to increase occupancy and increase table numbers. As it stands, we are still restricted in table numbers for family gatherings but if we have a tour group we can have multiple tables. No more than 6 to a table yet a pilot night club event went ahead last Thursday night at a reduced capacity in the button club temple bar. We are still awaiting confirmation from government as to how we will conduct our operations past October 22nd.
I will leave you with a little reminder for you to please have the conversation with your local TD and hopefully by next month my newsletter will be very positive with all restrictions scrapped and a Budget that will support our industry for the next 12 months. I would like to wish you all the very best and wish you a better October than last year at least.
Best Wishes, Mark McGowan -President