Restaurant owner on how big of an impact crisis is having
SLIGO ONCE HAD AN INSPIRING FOOD TRAIL BASED ON ITS MANY QUALITY RESTAURANTS BUT NOW ALL ARE SHUT AND CATHAL MULLANEY CHATS TO THE OWNER OF TWO BUSINESSES ABOUT WHAT’S AHEAD
The air at Eala Bhán and Hooked in Sligo town is usually filled with conversation and laughter, as families and friends mingle and enjoy themselves in the midst of the comfortable surroundings by the banks of the Garavogue.
Now, the only sound that is to be heard is that of the fridges humming in an empty restaurant.
This is the stark, unfortunate reality for many business owners in the hospitality sector in Sligo and beyond as the spread of the coronavirus decimates the industry - and with little indication of an end to the restrictions currently in place, it is a challenging time for proprietors of premises right across Ireland.
Given that the local economy in Sligo relies so heavily on visitors to the north west all year round, it is a particularly anxious time for those with restaurants, such as Anthony Gray, proprietor of the aforementioned Eala Bhán and Hooked restaurants.
“It’s just a case of taking it day by day, every day,” Anthony told The Sligo Champion.
“It’s not easy. There’s nothing we can do, and you’d be worried for what the future holds.”
With the doors shut on his premises, the work for Anthony has shifted from taking bookings to dealing with cancellations on a daily basis.
The arrival of Easter would ordinarily signal the start of the height of the tourist season, but this year the town and county will be bereft of visitors. It could be the case that 2020 passes without any tourists visiting the county, Anthony believes.
“I don’t think we’ ll see a tourist this year. For most, this year is completely gone and in my opinion we won’t see any tourists in Sligo this year. Maybe next year but we don’t even know that.
“There is going to be a global recession, it’s unchartered waters. It will be a deep recession, and we’re all going to be in the same boat, but no one caused this and its no ones fault.”
Through past involvement with the Restaurants Association of Ireland - of which he is a former President - and at a local level with innovative initiatives such as the Sligo Food Trail, Anthony is keenly aware of the importance of the food and drink industry to Sligo.
The difficulties for businesses in the hospitality sector may also continue beyond the issue of just reopening, with social distancing likely to curb the amount of customers they can serve.
While an easing of restrictions would allow restaurants and pubs to reopen, it is likely that social distancing measures will remain in place for a significant length of time.
These measures - while absolutely necessary - will severely limit the amount of people allowed in a premises at a given time, and therefore reduce the amount of income they can generate on a day-to-day basis.
“We’ve publicised the north west and Sligo very well,” he says.
“We have to hope that people will start to travel when this passes. But then there’s also the social distancing.
“If that is going to be in place, it would be the case that if a business that does 150 covers on a Saturday night would have to put in measures for social distancing, and they might be down to 60 covers on a Saturday night.
“And, on 60, it’d be hard to survive when you think about rates, electricity, gas. So the social distancing would also be a worry.”
The financial hit taken by restaurants will be significant. In the case of his businesses, Anthony is facing the widespread cancellation of all bookings, including weddings and groups of tourists.
“This time of the year is also busy with communion and confirmation parties for large family gatherings, but they too have been put off.
To help combat the inevitable drop in income, there have been calls from a number of sources nationwide for the government to introduce a wide-ranging set of measures to help the food and drink industry bounce back from the crisis.
Anthony is in no doubt as to where the government’s efforts should start.
“I hope the government take on the insurance companies,” he says.
“They [insurance companies] won’t pay out on business interruption cover. They just won’t pay out.
“We pay insurance like everyone else, the same way we pay insurance for a fire or anything else, but the insurance companies have just gone to ground. They had huge profits last year, and they will have huge profits again next year.”
Similarly, Anthony believes action is needed to address the uncertainty surrounding the payment of rates.
The government, in consultation with local authorities, has facilitated a plan whereby businesses most affected by the crisis can defer their rates.
“They are saying defer it, defer it. That’s fine now, but at some stage they will come looking for it. In England, they’ve stopped all utility bills and there’s a rent or rate freeze - no commercial rates. So far in Ireland there has been nothing.”
Supports from the government are absolutely necessary, Anthony outlines, for the basic survival of businesses all around the country.
There remains a real and substantial possibility that many businesses from all sectors of industry will not reopen their doors, even when the immediate threat of coronavirus has passed.
“I hope the government come out with a package for small businesses across the board. Small businesses are the back bone of the economy.
“We have no working capital - we’re at the bare bones. You have to remember the hospitality industry had a 50pc increase in VAT in the middle of last year, and some businesses nearly went to the wall.
“The first thing that is affected is tourism. We’re a coastal town that survives on tourists. They [the government] need to bail out everybody.”
Though the immediate outlook appears bleak, Anthony does retain an optimistic view that the Irish economy will revive itself after the Covid-19 emergency has passed and things begin to regain some semblance of normality - however long that may take, however, remains unclear.
“These are worrying times. I’ve seen where England’s economy is going to be hit by 35pc, and we all know if England sneezes Ireland gets a cold.
“But, you have to be positive. The economy will kick back.”
Meanwhile, Michael Yates, Chair of the Sligo, Leitrim and Roscommon branch of the Irish
Hotels Federation has called for a number of measures to be implemented to help the sector.
Local Authority rates and water charges: to be waived for a minimum period of 12 months.
These include: measures to assist with cash flow for businesses facing short term problems, including interest free loans and a minimum 12-month deferment on Senior debt (both Capital and Interest); tourism VAT rates to be reduced to zero for a minimum of 12 months and until the industry has recovered, then restored to 9% on a permanent basis. Employer’s PRSI to be reduced to 0.5% for a minimum of 12 months and until the industry has recovered; business interruption grants to help businesses survive and reopen; Supports for seasonal workers in tourism who do not currently qualify for Covid-19 related payments.
Mr Yates added: “At present most of our industry nationally is closed. We are seeking an urgent response to ensure that hotel and guesthouse properties are preserved and ready to scale up when the Covid-19 related restrictions are lifted. Tourism and hospitality businesses are now working to secure the necessary funds to survive and restart.
“That process involves making predictions around the period of closure and the length of time it will take for various categories of revenue to recover. Government controlled costs such as local authority rates, VAT and employer’s PRSI are having an enormously negative impact on viability scenarios during the recovery period.”
THEY ARE SAYING DEFER IT (RATES). THAT’S FINE NOW, BUT AT SOME STAGE THEY WILL COME LOOKING FOR IT. IN ENGLAND THEY’VE STOPPED ALL UTILITY BILLS AND THERE’S A RENT OR RATE FREEZE