The hospitality poor mouth

veryangryman

I think a major measure of whether I vote for any of the government parties is whether they stand up to the clear greed of hospitality who are seeking bias on the VAT rate yet again.

While stuff and people are expensive, it would take a madman to compare this to the 2008 recession where business was slow and they needed the help.

Currently the customer is getting hosed from hotels and restaurants alike. This cannot start to come out of the public purse again

Allinall

A reduction in VAT could arguably increase the tax take, due to

a) Increase in activity and

b) A reduction in social welfare payments due to businesses closing.

Boggles

https://www.boards.ie/discussion/2058366935/the-hospitality-poor-mouth

I think a major measure of whether I vote for any of the government parties is whether they stand up to the clear greed of hospitality who are seeking bias on the VAT rate yet again.

I doubt I would have it in my top 50 things to worry about.

But anyway McGrath basically stated and they were warned about it, if they don't pass on the reduction to customers they don't get it again.

The reduction was supposed to help customers and increase footfall, not as a subsidy to cover costs.

But it was always going to end up like that.

Sunny Disposition

Hospitality is bollixed, costs gone too high, way too expensive. VAT doesn’t help, but it’d be bollixed anyway.
It got very cheap to eat out for a number of years, but that’s over now and the sector is in a painful contraction.

ancapailldorcha

https://www.boards.ie/discussion/comment/122561044#Comment_122561044

How does businesses closing reduce social welfare payments.

Last time I ate out in Ireland cost me nearly 60 Euro. It'd have to get a lot cheaper for me to countenance doing that regularly. This was in Mayo as well.

Marty Bird

https://www.boards.ie/discussion/comment/122561729#Comment_122561729

I assume the poster means that if they reduce vat less businesses will close and workers won’t need to claim sw benefits.

ancapailldorcha

https://www.boards.ie/discussion/comment/122561759#Comment_122561759

Ah. Ok. VAT is a bit regressive since everyone pays the same regardless of means but I don't think it's the biggest problme here. I think the issue with hospitality is that it's expensive for the consumer and horrible for a lot of workers. I did my time in a rural hotel and it was horrible. Great camraderie with the rest of the staff but we were verbally abused by management quite regularly.

Allinall

https://www.boards.ie/discussion/comment/122561729#Comment_122561729

Sorry. Meant to say "not closing".

I agree it is now prohibitively expensive to eat out other than for a special occasion (for me anyway).

2smiggy

they got a reduction, and abused it badly, and was put back up to 13.5%. Why do the same thing again, only for them to abuse the lower rate again ?

kowloonkev

https://www.boards.ie/discussion/comment/122561793#Comment_122561793

I saw a lot of packed restaurants on weekday evenings when I was home during the summer. That doesn't mean the industry is booming of course.

Some other things I noticed were a lot of strange opening hours because of staffing issues. My parents would be filling me in on the timetables about which place is closed on a Tuesday or a Friday. You'd need a wall chart to know when to go out.

A lot of places popular for food back in the day close at 6pm. Towns are dead with three or four hours of daylight left in the evening. Winter is bleak enough I don't know why they can't make hay while the sun shines.

I don't know why there's a staffing issue. Either minimum wage is too high, or minimum wage workers are being taxed too much?

L1011

13.5% is fairly low by European standards, many countries just charge their passing rate (up to 25%) for restaurant food.

Hotels have absolutely shafted themselves having any chance of getting in if there is a future reduction.

2smiggy

https://www.boards.ie/discussion/comment/122562041#Comment_122562041

no involvement in the industry, but the minimum wage is too high to be paying college students during the summer holidays, doing the most basic of work. They would be paying little or no tax (summer workers, not full time staff)

LambshankRedemption

https://www.boards.ie/discussion/2058366935/the-hospitality-poor-mouth

I was in the pub the other night and bought a round and looked at the receipt. 400ml of coke (Not coke and a short, just the coke) €7. This was not in Temple Bar either, just a normal pub. Pints over the 6 euro mark too.

Hotel prices have sky rocketed in recent times. The last few meals Ive had out, all started around the 18 euro mark. In one place I remember it was 22 for fish and chips. Now I admit the fish was very good, but even so, it would make you think twice.

kippy

https://www.boards.ie/discussion/comment/122561073#Comment_122561073

Hard to disagree with this. Outside the cities we've seen restaurants, coffee shops and pubs either close by the bucket load OR significantly reduce their hours of opening. Those that are still open have increased their prices dramaticilly and unless they can maintain footfall, they'll find it difficult to maintain a trading environement.

Granted there are parts of the country where people eat out in large numbers (mainly cities) but with current price trends its hard see how much longer that can be maintained for.

Tourism in general is heading in the same direction - accomodation costs have gotten way too high, for numerous reasons, and the product being offered hasn't really improved in any way.

I don't think a VAT change is going to do too much for the industry - there's a lot of other things that might help a bit but the horse has already bolted for many businesses.

Ivor_Guddon

while TGI Fridays isn't a restaurant etc , i was there with my 2 kids last week

2 portions of boneless chicken wings

2 portions of fries

2 pepsi

they don't do all this as a meal price but all individual prices

i had a brownie

Cost €59.34

that's shocking

breezy1985

https://www.boards.ie/discussion/comment/122562041#Comment_122562041

The country is at full employment so lower paying industries with poor working hours will lose out. Buses and haulage are having similar problems. The industry spent the 00's relying on Eastern European staff but that option is long dried up.

COVID also meant a lot of the experienced staff moved on to other industries and didn't come back.

In terms of dead towns after 6pm our over reliance on cars is easily the dominant factor. Add to that the Irish mentality of "have to be dolled up" and "have to be out till close" and you have the post work hospitality scene destroyed in many places.

Boggles

https://www.boards.ie/discussion/comment/122562094#Comment_122562094

What?

A lot of college students do not have affluent parents, they are working during the summer to pay the extortionate prices of rents, goods and services like everyone else and the associated taxes that are applied to them.

What you claim is the "most basic of work" is also some of the hardest with very poor conditions and the longest hours.

Peoples labour has to come at a premium. 12.70 is hardly a massive amount of recompense.

breezy1985

https://www.boards.ie/discussion/comment/122562131#Comment_122562131

TGI Friday's was always a gimmicky ripoff.

It's easy to tell before you go in the door. I assume though like a lot of people it wasn't your choice and it was more for the kids.

What would be great is to have the VAT cut for business under a certain size to promote local businesses. It worked wonders for the brewery trade in the UK.

the_amazing_raisin

Personally I'm glad that hospitality workers are finally in a position to demand better wages.

It's about the most thankless job around and subject to frequent abuse by customers and management

I think as a nation we're just going to have to reckon with the fact that the hospitality sector isn't going to be a growth industry outside a few tourist hotspots

Most towns can realistically support 1-2 sit in restaurants and pubs rather than the 5-6 they often seem to have

downtheroad

If the difference between 9% and 13.5% VAT is keeping a business open, they won't last very long as it just takes an increase in rent/insurance/wages/raw materials to obliterate that margin and they're loss making again.

Ivor_Guddon

https://www.boards.ie/discussion/comment/122562213#Comment_122562213

that would involve the Government to use the noggin but as we know that's not possible for the gravy train brigade

foxsake

hospitality is on its knees - in dublin places are closing like crazy

also Friday night is quite quiet in many places now as opposed to before

VAT is pure robbery anyway - people may their income tax on their money and then further rinsed by VAT on nearly everything they buy

reduction in VAT is the bare minimum the state should do .. it needs to do a lot more to ensure a vibrant social life for all ages in all corners of Ireland.

downtheroad

https://www.boards.ie/discussion/comment/122562244#Comment_122562244

But the restaurant owners and hospitality industry won't pass the VAT reduction on to the consumer, so it's pointless hoping for costs to come down if any change is made.

downtheroad

Why are so many Irish restaurants suddenly closing their doors?

The owner of Las Tapas da Lola features in this podcast, and is complaining about the VAT rate, which she then says is 12.5% (which is wrong, it's 13.5%). If a business owner doesn't know this basic figure, its hard to take her seriously when she's complaining about the rate of VAT for her industry).

https://www.irishtimes.com/podcasts/in-the-news/why-are-so-many-irish-restaurants-suddenly-closing-their-doors/

Boggles

https://www.boards.ie/discussion/comment/122562260#Comment_122562260

Looking at one of the menus 3 quid extra for pepper sauce with a steak sold for 40 quid is next level píss taking.

Deeec

Unfortunately a restaurant/cafe needs to have a large volume of customers to survive nowadays. The high cost of staff, insurance, sick pay, electricity, gas, rates, food, drink have made many business's not viable. Customers dont seem to understand that the food on their plate is not the only cost to the business! Someone also had to be paid to prep that food, cook it, set your table, serve the food and clean the table as well as manage, do the accounts and clean.

There is also the problem of a customer hogging a table for hours while they sip their one cup of coffee and the customers who eat 3/4 of their meal and then complain and refuse to pay.

Its a very hard business to be in and only the very busy ones will survive. I dont think changing the VAT rate will make any difference whatsoever.

BlueSkyDreams

https://www.boards.ie/discussion/comment/122562244#Comment_122562244

They are hardly closing like crazy in the capital.

There have been a few closure recently but places have been opening during the same period.

Flaneur OBrien

I genuinely don't know the answer to this

Isn't part of the blame (not all!) to be laid at the hands of owners/ management?

When a hospitality business starts up, it's generally always a huge undertaking with new or removed partitions, new flooring, wallpaper/paint etc. You never (or rarely) see someone just going in and changing a menu and the name above the door and bit by bit changing the place. So most businesses start off in huge debt.

Then there's wages. Most hospitality staff are on minimum wage, a lot are on €15 per hour, but what do owners expect to earn? I knew one chap who owned a few restaurants and he closed one of them down because he was "only" making a steady 10 or 20 grand from it over the last few years. It was doing ok business-wise, wasn't in debt and there was about 10 employess (IIRC). The manager did all the work, the owner swung by every couple of weeks to see if everything was ok, but he really was an absentee boss.

I accept that that situation is probably the exception, rather than the rule, but do people have a false idea of what a success is?

I once managed a coffee shop for a couple of years, and my bonus was based on a 10% year on year growth. To my mind, that was always impossible over the long term, and it would only punish me the following year if I had a good week. The prices didn't go up 10% year on year, and the wages weren't going up 10% year on year.

I left that job when the owners (who I very rarely saw) decided they weren't making enough anymore, so me and 4 other employees (2 with kids) were gone, even though the shop wasn't in debt, paid it's way, and was well liked in the community.

Boggles

Unfortunately a restaurant/cafe needs to have a large volume of customers to survive nowadays.

They always needed a large amount of loyal customers to survive, same as any other business in reality. Unless their is a monopoly.

How is that achieved?

The ones in my locality thriving offer good keenly priced food with good service.

The ones who closed were usually over priced wankery with nothing but distain for customers or ones that were passed down to sons and daughters who absolutely no idea how to run a business and ran into the ground.

One special case who inherited a business that was around for 30 years decided it was a good idea to spunk half a million on an interior designers wet dream.

There is absolutely challenges in the industry, but that goes for every other industry, thinking of the 2 best places in my locality they were both traditional pubs who diversified because they had to.

thomas 123

https://www.boards.ie/discussion/comment/122562162#Comment_122562162

especially true when you consider the waiter or bar person covers their wage in a few transactions.

eg think of the cost and mark up of:

2 x pints

4 x cokes

Or

1x main course

LambshankRedemption

https://www.boards.ie/discussion/comment/122562244#Comment_122562244

The problem is you can't trust the hospitality sector to then pass the VAT saving on to the consumer.

I like to cook, but I lived abroad a few years ago and honestly it was often cheaper to eat out than cook at home. You could not claim that here at current or recent prices.

Even cheap food, like fast food Ive noticed the prices going up and up. A whopper meal in Burger King, I have just checked is 11.65.

Deeec

https://www.boards.ie/discussion/comment/122562377#Comment_122562377

Unfortunately its not as simple as that Thomas. You are ignoring all the other costs involved.

Most establishments have a limited number of hours per day where they are actually busy and thats the problem. Staff still need to be paid for the hours they are standing around with very little to do.

enricoh

Government has loaded up costs on small businesses and have made them unviable. If so many are closing in August in peak tourism it's gonna be hairy come winter time.

Government have blank cheques for the refugee industry but can't afford to cut rate for hospitality. It's already slim pickings for food where we holiday on wild Atlantic way n I can't see many tourists being impressed when there's only horsebox coffee and a chuck wagon left.

BlueSkyDreams

https://www.boards.ie/discussion/comment/122562392#Comment_122562392

Even if the VAT reduction isn't passed on to the customer, it still reduces the cost of running the business. For those places operating on the margins, it could be make or break.

Remember also that when minimum wage goes up, everyone elses wages go up with it.

If the govt increase MW and don't give something back to offset the cost rise, there is obviously going to be a negative impact on hospitality and other businesses.

veryangryman

The trick in the VAT name is value ADDED tax. So the price of the food is the price of the food. You then add the tax. Your staff wages and business running costs should be factored into the pre VAT rate.

Not doing this makes you a prick and not deserving of a VAT cut.

Boggles

https://www.boards.ie/discussion/comment/122562416#Comment_122562416

Government have blank cheques for the refugee industry but can't afford to cut rate for hospitality.

Where was it stated they cannot afford to cut the rate?

The rate was cut with the expressed understanding that this cut would be passed on to the customer, which in turn would have driven footfall.

It didn't happen. They were warned several times about it.

What do you suggest they do or was your post just an attempt to shoe horn refugees into the conversation and blame them for everything as usual?

Deeec

https://www.boards.ie/discussion/comment/122562392#Comment_122562392

Agreed. But next time you cook, pay yourself minimum wage for the time it took you to prepare the food, cook it and clean up afterwards - for an hr and a half your probably looking at a cost of €20. Add that to the cost of your food and consider how much electricity/gas you used. It does make you think that maybe the €20 meal you go out for isnt so bad value. Realistically a restaurant isnt making a whole lot on that meal even with economies of scale when you factor in insurance, rent, rates etc.

Geuze

Commercial rents are way too high.

This shop unit in Eyre Square SC in Galway is approximately 116 sq.m (1,249 sq.ft) NIA.The property is let to Now Newsagents Ltd t/a The Card Shop subject to the terms of a 35 year lease agreement from 1 July 1991. The contracted rent under the lease agreement is €131,900 per annum, however the tenant is currently paying rent in the amount of €100,000 per annum.

https://www.daft.ie/commercial-property-for-sale/unit-216-eyre-square-shopping-centre-galway-city-centre/5795568

2,000 per week in rent!!!

antimatterx

A pub I go to double the priced of its burger when they reopened after covid and are now crying for the 4% vat decrease. **** them.

Flaneur OBrien

https://www.boards.ie/discussion/comment/122562468#Comment_122562468

Yeah, that's friggin' ridiculous. This is one of those moments where I am AOK with the government stepping in to make sure commercial landlords aren't gouging tenants. The amount of empty shops in shopping centres/towns etc all over Ireland is utterly criminal at the moment.

Then there's the issue of rates as well. They need to be brought down to a manageable level. We should encourage people to start new, local businesses as well and try and move away from the bland franchise model. Your rates should be extremely low if you own and operate one shop, and increase according to how many shops/restaurants etc you have in the country.

Padre_Pio

https://www.boards.ie/discussion/comment/122562392#Comment_122562392

I said this in another thread and worth re-iterating here:

The VAT reduction given during COVID was never intended to be passed to customers. It was designed to help businesses hit by social distancing and other restrictions.

It seems McGrath has forgotten this point.

LambshankRedemption

https://www.boards.ie/discussion/comment/122562454#Comment_122562454

I know all of that and I am not denying it. What I would like to see is a review of things like commercial rates, commercial rents and the dreaded insurance.

cal naughton

The issue is not the Vat rate it's the minimum wage increase. They are crying over the Vat as if they talked about min wage increase they would look like assholes

https://www.boards.ie/discussion/comment/122562131#Comment_122562131

I spend less on my weekly shop.

Wanderer78

…we better start doing something about the slowing down of the velocity of the money supply, or more and more sme's are just gonna shut!

…housing definitely is playing a part here, with more and more going towards providing housing, less and less is going towards spending in these sme's….

enricoh

https://www.boards.ie/discussion/comment/122562434#Comment_122562434

The vat rate at 13.5% is third highest in Europe and puts Ireland at a disadvantage enticing tourists.

I suggest the government revert back to 9% n try keep places open.

If they can't afford it, take the 500 million required out of Roderick's budget as he pees away billion upon billion.

Top tip - try attracting tourists over passport flushers.

Flaneur OBrien

https://www.boards.ie/discussion/comment/122562553#Comment_122562553

A full time(37.5hour) minimum wage for a week is €476.25, the take home will be approximately €428.

Could you look after yourself, possibly a child or two on that?

Remember the purpose of a minimum wage (according to the International Labor Organization:

The purpose of minimum wages is to protect workers against unduly low pay. They help ensure a just and equitable share of the fruits of progress to all, and a minimum living wage to all who are employed and in need of such protection. Minimum wages can also be one element of a policy to overcome poverty and reduce inequality, including those between men and women.

Source: https://www.ilo.org/topics/wages/minimum-wages/how-define-minimum-wage

I have no issue with the minimum wage. There's a multitude of problems OUTSIDE of that that are driving costs up. Heat, Electricity, Insurance, Rent, Shrinkflation etc.

breezy1985

https://www.boards.ie/discussion/comment/122562416#Comment_122562416

The Wild Atlantic Way was always sht for food. It's much better now than it used to be.

I'de say we were the only country dumb enough to have a massive coast devoid of seafood restaurants.

Wanderer78

https://www.boards.ie/discussion/comment/122562692#Comment_122562692

…maybe shrinkflation is actually just price gouging by some sectors!

Boggles

https://www.boards.ie/discussion/comment/122562652#Comment_122562652

Yawn.

Deeec

https://www.boards.ie/discussion/comment/122562692#Comment_122562692

Im in favour of higher minimum wage in the hospitality sector as it is a hard thankless job but the consumer has to be prepared to pay for it. The consumer has to be realistic and should be prepared to pay a reasonable amount for quality food and service.

Weve seen it in this thread people want quality food, staff to be paid fairly but they themselves want to pay a small price for this. Cant have it every way!