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Hospitality firms pay price of virus lockdown



The Cill Aodain Court Hotel in Kiltimagh, Co Mayo

The Cill Aodain Court Hotel in Kiltimagh, Co Mayo

The Cill Aodain Court Hotel in Kiltimagh, Co Mayo

The Cill Aodain Court Hotel in Kiltimagh, Co Mayo, closed its doors on St Patrick's Day.

Like many premises in the hospitality sector, the 17-bed, three star hotel had fallen foul of the coronavirus.

Prior to the closure, business had already fallen off a cliff, according to owner PJ Staide, who refurbished and reopened the hotel five years ago after returning from the US.

It had lain idle for most of the recession and prior to that, it had been a busy hotel since the 1960s.

It had a special place in the community's heart and because it was located on Main Street, where many businesses had been decimated during the financial crisis, it had been embraced by its largely local clientele since its reopening.

The other hotel in the town is now also closed, as are the five remaining pubs, because of coronavirus.

Given the impact of the pandemic on the hospitality sector, Staide had no choice but to close the doors, for the moment anyway.

"It was unsustainable, it was a difficult decision to make and it is a temporary one. We will have to see what happens. I have 20 full and part-time staff, and their families, to consider in all of this," said Staide.

But Kiltimagh could be any small town in the country. The hospitality sector is a cornerstone of the rural economy, as well as being a big contributor to the national one.

Prior to the coronavirus pandemic, accommodation and food service activities contributed about €4bn of total gross value to the Irish economy.

Before the virus hit, about 250,000 people were employed in the hospitality sector between hotels, restaurants, catering and tourism businesses. But last week, 180,000 of those jobs were lost.

"Never did we ever think this day would come," said Adrian Cummins, chief executive of the Restaurant Association of Ireland.

"The situation is deteriorating each day, with over 100pc cancellations of corporate business and 100pc cancellation of domestic business in Ireland for the next two months at least."

"Of those 180,000 jobs, we believe 65,000 of them are in the restaurant sector alone. Depending on what actions the chief medical officer takes, you could see the remaining 5,000 jobs in the sit-in restaurant industry gone by March 29," he added.

According to Cummins, the systematic collapse of the restaurant and hospitality sector due to Covid-19 needs to be taken into consideration by the Government.

"We are demanding that the Government immediately implements emergency business supports to reopen the thousands of businesses and put our industry back to work."

The association has a number of asks of the Government in light of the virus.

They include the immediate introduction of the 0pc Vat rate for tourism and hospitality businesses; a halving of employer PRSI to support employees; a six-month business rates holiday from local authorities, as well as the introduction of a Revenue moratorium on VAT payments.

Government intervention is something that the Cill Aodain's Staide is calling for too: "The industry is on its knees and needs State support in relation to rates and a cut in the hospitality Vat rate."

However, according to Pat McCann, chief executive and founder of Dalata, the country's biggest hotel group, while the hospitality sector is massively exposed to the virus fallout, the Government has to be balanced in providing support to the business sector as a whole.

"Having said that, the pandemic is causing hotels a lot of angst; it's all about cash flow. In 52 years in the hotel business, I haven't seen anything like this and, like other businesses, we will need support," McCann added.

"Generally speaking, hundreds of hotels have closed around the country and the challenge is how many of them will reopen."

Prior to the virus hitting, Dalata employed 5,000 people in its Irish and UK hotels.

The group, which includes the Maldron and Clayton brands and was formed by McCann back in 2007, operates almost 9,000 owned and leased rooms across about 30 hotels. But it has recently had to undergo some cost-cutting at its operations, including lay-offs.

"It's across the board and it doesn't matter where in the operation you work," said McCann, who would not be drawn on numbers.

"We will need these people back again when this is over.

"We are planning for six months' disruption and beyond. Looking towards March or April is too short a time-span. This will end and we will come out of it, but it's a case of how long it will take.

"We are continuing with our expansion plans in Ireland and the UK and we have retained Deloitte to look further afield in Europe. I am a relentless optimist."

Sunday Indo Business