The hospitality poor mouth

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.

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.

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

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).

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?

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)

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.

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.

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.

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.

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.

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.

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

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.

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.

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?

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!!!

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.

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.

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.

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.

Yawn.