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»»Half of restaurants will not survive post-lockdown rules »»Industry spokesman urges Government support for sector
UP to half the restaurants in Ireland could close down, it was revealed yesterday.
A damning report on the sector also warns the associated lay-offs would cost the economy billions.
The Restaurants Association of Ireland claims businesses will be forced to shut down permanently if the Government does not intervene with support.
Its chief executive Adrian Cummins said: “In the long run, we estimate almost 50% of restaurant businesses will struggle and shut their doors if the Government does not intervene.”
It also warns the recently-promoted staycations will not be possible if the tourism and hospitality industry is not supported.
Meanwhile, the RAI said banks and landlords are putting pressure on businesses that are already struggling.
The warning comes on foot of a damning report about the consequences of not supporting the restaurant sector.
The paper, prepared by Jim Power Economics, claims the accommodation and food services sector has been seriously damaged by the Covid-19 crisis.
The report, which represents the first fully-costed recovery plan published for the industry, said if staff lay-offs continue at current levels, it would have devastating consequences for the Irish economy.
The findings added if 100,000 workers were to remain unemployed for a full year, it would cost the Exchequer €2billion in increased social protection expenditure. It would cost the Exchequer up to €500million in lost pay roll taxes and €240million in lost VAT.
Continued unemployment would also cost local authorities €52million in lost commercial rates.
Economist Jim Power said: “Once it reopens, the trading environment will be extremely challenging as a result of social distancing requirements, various health protocols, the absence of overseas visitors and consumer
nervousness. The sector is a major employer all over Ireland and is an essential element of economic and social life.”
He added the Government must provide the maximum possible support for this important sector.
Mr Power said: “The cost of such support would be far outweighed by the cost of doing nothing, in terms of job losses all over Ireland, closed businesses on the streets of towns, villages and cities all over the country and the damage to Ireland’s tourism offering.” Restairants Association of Ireland boss Mr Cummins echoed Mr Power’s calls for Government support.
He said: “This report is damning evidence that our sector needs support measures put in place immediately by the Government.
“Our members are stating a
50% staff lay-off is inevitable unless they receive supports.
“The Government has been promoting staycations and weekends away for the months ahead. Let me be very clear on this.
“There will be no staycations if our restaurants and hospitality businesses close. Indigenous businesses will be lost for ever.”
The report calls for a number of recovery measures including for the Covid-19 wage subsidies to continue over the next two years, although at a reduced rate as time passes.
It also urges the State to cover local authority costs for the next year as restaurants and hotels get back on their feet.
Other notable findings in the report included a demand for 0% VAT for the restaurant sector should be introduced until the end of 2021.
On Friday restaurants and hotels got the green light from the Government that they can begin to trade again after the 12-week lockdown which started in March