LAST ORDERS? PUBS FACE BATTLE FOR SURVIVAL AFTER COVID-19
The nation’s pub trade is facing an unprecedented crisis amid the pandemic, but some are thinking towards what will come next, writes Sean Pollock
WITH the sun splitting Dublin’s stones for most of last week, Máire Ní Mhaolie, co-owner of the temporarily closed 57 The Headline Bar, was cursing her luck. It would be an ideal time for serving her thirsty customers some refreshing Aperol Spritz.
With bars across Ireland closed to patrons as a result of the Covid-19 pandemic, Ní Mhaolie and her husband Geoff Carty, who she owns the bar with, have been forced to get inventive to keep revenue flowing. The husband and wife duo have started selling and delivering boxes of craft beer, wines, and gin and tonics to locals eager for a tipple to help get through the lockdown period.
Last Wednesday, the publican discovered just how valued her services are by the locals, when she saved the day for a distressed bride-to-be.
“I did a delivery just there, a lady rang me up in a panic,” she said. “They were feeling down in the dumps because her friend’s wedding had just been cancelled.
“She asked if I could do a box of Dingle Gin with some tonic waters and I said, ‘absolutely no problem’. She wanted me to write up a little message, which I did. When I delivered it over, her friend was delighted; it was just such a nice thing to be able to do.”
Deliveries of the alcohol boxes have meant that 57 The Headline Bar has maintained 30pc of its average weekly revenue, meaning the owners were able to rehire a few members of staff. They have even reopened the kitchen, where they are running a click-and-collect food service.
However, delivering premium Irish gin to devastated brides-to-be won’t be enough to save Ireland’s stalled bar industry.
With Covid-19 restrictions and social distancing guidelines, Ní Mhaolie and many other publicans the length and breadth of the country share some common concerns.
When will pubs be allowed to reopen, how will the public’s concerns over Covid-19 influence their future, and what will Irish pubs now look like?
Ireland’s pubs aren’t only an important part of the national psyche; they also account for a substantial portion of the economy.
According to the Vinters’ Federation of Ireland, there are 7,500 licensed premises in the country, employing approximately 50,000 people.
Its most recent figures for 2017 show that the bar and off-licence sectors were worth an estimated €6.84bn, with the areas spending around €1.3bn on services and material inputs.
Despite its hefty economic size, pubs were among the first causalities of the Covid-19 outbreak.
First, bars started enforcing limitations on the number of people allowed inside premises. Not long after that, the shutters were pulled down by the Government.
The closures came before St Patrick’s Day; the annual gold rush for publicans across the island of Ireland.
Like most businesses, pubs will be shut until May 5 at least. However, there is a widespread expectation that they will be closed until a vaccine has been produced — something which could be several months away.
The situation has left publicans collectively scratching their heads, wondering when they might be allowed to pour creamy pints of Guinness to the nation — and if the days of buzzy bars full to the rafters with thirsty customers having the craic are effectively over.
So what is in store for Ireland’s world-renowned pubs? John Ryan, director in the hotel and licensed team at commercial real estate services firm CBRE, said trends in the parts of Asia that are starting to reopen could give us a clue.
Ryan said that food and beverage services in some hotels across Hong Kong had started reopening, implementing restrictions that ensure customer safety and social distances are maintained. He said he understands that some places are booming.
“In Hong Kong, we are seeing maximum group bookings of four people, with the thinking that this is the typical size of the nuclear family. There is also spacing of 1.5 metres between tables.
“If you can imagine progressing that out a little bit, could a publican say, ‘Yeah, I might not turn over as much as I could do, but at least I am back up and running and offering a service to my customers’?”
Ryan is hopeful that the Irish people will emulate their peers in Hong Kong and emerge from lockdown thirsty for socialising at the local pub. However, he believes that Ireland’s pubs will need to implement measures to provide customers with a sense of safety when they do reopen.
Pubs may have to introduce services such as seat reservations and bookings, while also halting the walk-in trade to reduce overcrowding — big moves for a business proud of saying fáilte to as many people as possible. He also believes that the food and drink offering is going to be all the more critical once this pandemic passes, as well as offering click-and-collect services to keep the pennies rolling in now.
Looking further into the future, he accepts there will be casualties in the pub trade. He remains hopeful, however, and believes that pubs which adapt will survive.
“The pubs that are going to survive are those that constantly reinvent themselves and reinvest in their customer,” he said.
“There are going to be lots of pubs not fit for purpose. We see that already with the number of pubs disappearing.”
The thought of a post-lockdown reinvention isn’t for everyone, particularly given the changes pubs have already had to make which have hit their bottom lines. The smoking ban of 2004 and the recession forced pubs into a rethink over how they do business.
The importance of outdoor space, putting on events and offering quality food service emerged from those periods of turbulence.
Pubs also cut costs to improve margins, with many believing that they had just got to a point last year where the industry was performing well.
Indeed, Limerick publican Thomas O’Sullivan, who runs The Still House Bar, Russells Select Bar, Hi Way Bar and Restaurant, and The Westward Ho Bar and Grill, said the sector had already cut its cloth as much as it could, with margins paper-thin.
O’Sullivan said the cost of running a pub, from paying staff to bills, rent, rates and taxes, could become overwhelming. He believes too many bars are reliant on the profitable and busy Friday to Sunday trade, covering the cost of the loss-making quieter periods.
“If you were saying to me that we had to cut the number of people we can have in the pub by half during that busy period, then the maths don’t add up. It won’t work.”
O’Sullivan said it’s unknown what the future will hold, but he acknowledged that change would have to come to ensure that customers feel safe when going to their favourite pub: “How we do business will have to change. Our people will have to sanitise, surfaces will have to be wiped down periodically, a heightened consciousness toward touch points. All these things will have to happen.
“If you have a crystal ball handy, you are looking in to see things that could happen. I don’t think these things will work in an Irish bar.”
Louis Fitzgerald, the owner of the Louis Fitzgerald Group of over 19 pubs, restaurants and hotels, is also worried about the effect this will have across his businesses.
“I think we have a major crisis in the hospitality business,” he said. “I was 50 years in business last year. If someone was to ask, ‘where are you
I’d have to say, ‘I’m at a crossroads and I don’t have a map’. To me, it’s like starting up a new business again”
now and where do you think you are going in the future?’, I’d have to say, ‘I’m at a crossroads and I don’t have a map’. To me, it’s like starting up a new business again.”
Fitzgerald, who owns famous Dublin haunts including Kehoes and The Stag’s Head, said he would like to see the industry reopen together, but doesn’t envisage this happening for a long time. The experienced publican feels that pubs will undoubtedly have to restrict the number of people they let in, which he said could be achieved by updating maximum capacity figures on fire certificates. He also said some pubs might consider earlier closing times, such as finishing up at 9pm.
Distancing will also be a primary focus, said Fitzgerald, but he hopes that it won’t last forever.
“We’ve worked out all the turbulence that faced us before this virus, we took them on board, and we worked them out. I think we will do that again, but there is a time factor.
“I do think that the business will never quite be the same again. Our premises will have to revert to dining and food. That trend has been knocking on the door for years.”
Fitzgerald said the biggest problem facing the trade is the substantial fear factor that will surround going to the pub when they are allowed to reopen.
“We will train our staff to deal with the fear factor that is going to hit our premises. We have to ensure that we have given [the public] confidence and entice them back with open arms, and show them this is a safe environment for them.”
The presumed losses this year won’t stop Fitzgerald from investing in the business. Twelve of his premises are set for some renovations during the closed period.
He plans on forking out around €5m to improve the toilets and gear some of his establishments toward food.
Looking to the future, Fitzgerald, like many of the other publicans, is confident the industry is resilient enough to come through this period ready to go again.
While he acknowledges he has never seen anything like Covid-19 before, which has meant he has been unable to attend the funerals of some friends who have died in the past week, he is sure the sector will find its feet and continue to serve the Irish public — just like it has done for hundreds of years.
“It’s going to be slow; we were happy enough with how we came out of the last recession as a group,” he said.
“I think that after some time out, we will be back again. There is no reason in the world why not.”