Budget 2021: Hospitality sector warns measures need to be extended

The hospitality sector has welcomed a number of measures announced in Budget 2021. This will see...
Jack Quann
Jack Quann

17.24 13 Oct 2020

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Budget 2021: Hospitality secto...

Budget 2021: Hospitality sector warns measures need to be extended

Jack Quann
Jack Quann

17.24 13 Oct 2020

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The hospitality sector has welcomed a number of measures announced in Budget 2021.

This will see a new scheme to provide support for businesses affected by coronavirus shut-downs, a waiving of commercial rates for the remainder of 2020 and a drop in the VAT rate for hospitality and tourism.

The Licensed Vintners Association (LVA) has welcomed the measures, which they say should keep some pub doors from permanently closing.


However they also cautioned that the these measures will need to be extended if the period of restrictions is prolonged.

The group said this is particularly true of the Covid Restrictions Support Scheme (CRSS), which will provide cash grants to businesses which have been closed by Government restrictions.

It said: "While this is a positive programme which will finally provide real relief to pubs who are forced to keep their doors closed, it is currently expected to run only until March 2021.

"With pubs and the rest of the hospitality sector potentially facing ongoing, rolling public health restrictions into next year, the LVA says the programme may need to be reviewed and extended before March 2021.

"Non food pubs in Dublin have now been closed for 211 days and counting, the only pubs in the country who have not been able to trade in that time.

"The LVA believes that the CRSS scheme should be made available retrospectively to those 'wet' pubs which have not traded since March 15th."

pubs Fáilte Ireland File photo. Picture by: Philip Toscano/PA Archive/PA Images

The LVA also welcomed the Government’s commitment to avoid a "cliff edge" ending to the Employment Wage Subsidy Scheme (EWSS) by extending it to the end of 2021.

The representative body for Dublin pubs believes this measure will need to be reviewed in early 2021 - with a view to increasing the level of wage support back to TWSS levels.

And it said the reduction of the VAT rate to 9% will also help the pubs who serve food and will benefit those businesses if and when they are in a position to trade.

Donall O'Keeffe, chief executive of the LVA, said: "The importance of this budget to the pub sector in Ireland can’t be overstated, it was very much the last chance saloon for whether many pubs would see out the year.

"Thankfully based on initial review it looks like real, support has finally been provided to the pub sector which has been shut by order of the Government."

"On the face of it the Government’s Covid Restriction Support Scheme appears to be exactly the type of assistance that should have been forthcoming for pubs and other sectors of the economy who have been taking the hit due to the public health restrictions.

"We have long argued that if pubs and other businesses need to stay closed to protect the public good, then these businesses and their employees should be properly compensated."

"We would also encourage the Government to review and recognise the impact of these measures, particularly when it seems like pubs and the rest of the hospitality sector will be facing rolling restrictions well into 2021.

"It would be counterproductive if the restrictions were to last a lot longer that the current window outlined for some of these supports, particularly given how much strain these businesses have been placed under already this year".

'Budget needed to reflect reality'

The Vintners Federation of Ireland (VFI) said the measures will bring "some degree of confidence" to publicans.

But that there is disappointment the budget failed to reflect the fact these outlets will have been closed for almost nine months.

VFI chief executive Padraig Cribben said: "It's clear pubs will be exposed to the full force of social distancing measures to suppress the spread of COVID-19 until a vaccine is found.

"In that context, the budget needed to reflect the reality our members will face over the coming months.

"The CRSS provides a degree of hope in that it will supply much needed grant support to publicans for the next five months if we remain at level three or higher.

"The new scheme provides a bridge to the future where COVID is over and normal life resumes.

"Publicans have paid a huge price for closing their businesses so this announcement is the least they deserve.

"Government needs to address the fact these businesses have been closed for a protracted period and reflect that in the support package.

"The reduction in the hospitality VAT rate from 13.5% to 9% is a welcome development for the food and accommodation sector.

"At present it's of little use to most hospitality businesses but hopefully they can avail of the full benefit in 2021."

'Pathway for re-opening'

Drinks Industry Group of Ireland (DIGI) chair Liam Reid said: "While we welcome and await full detail of the measures announced today, including the Covid-19 Restrictions Support Scheme (CRSS) and the reduction in the hospitality and tourism VAT rate to assist the drinks and hospitality industry, we must now move to establish a pathway for the re-opening and, importantly, long-term recovery of this sector.

"This is ultimately what will save this industry.

"We have seen signs from Government in recent weeks that the magnitude and enormity of the challenges facing the drinks and hospitality industry are being realised and accepted.

"Today's budget measures, coupled with the establishment of the hospitality forum, which convened for the first time last week, are necessary and essential first steps in addressing the grave challenges facing the sector.

"However, the journey for Ireland’s drinks and hospitality industry has only begun, and it will be a lengthy one.

"Today, a significant portion of businesses in this industry across the country remain closed. Every week of closure makes it even more difficult and costly to reopen, to trade, and to recover."

"We must move fast and the next step in this journey is the National Economic Plan expected to be published next month.

"This plan, due to include long-term priorities and measures for economic sustainability, needs to focus on stimulating the key industries integral to economic recovery, including Ireland’s drinks and hospitality industry.

"Targeted, long-term policy decisions need to be taken to help this industry recover, grow and, importantly, create and maintain jobs lost in Ireland over the course of 2020."

The Restaurants Association of Ireland (RAI) has described the budget as a vital step in supporting a struggling and flattened hospitality sector.

However, CEO Adrian Cummins has warned that the hospitality VAT reduction is only a competitive driver if businesses are open and able to trade.

'A devastating blow'

The Coach Tourism and Transport Council (CTTC) - Ireland's largest representative body for coach touring companies and private bus operators - said the hiking of tax on diesel in the budget represents a devastating blow to an already crippled sector.

It said Government has "completely abandoned" the sector with no regard, plan or incentives to get the industry back on its feet

The cost of petrol and diesel are set to rise at midnight due to a €7.50 increase in the carbon tax.

This will add €10.10 to an average coach with a 400-litre tank of diesel.

CTTC chairperson John Halpenny said: "We feel completely abandoned and let down.

"The hiking of taxes on diesel in the budget has been a devastating blow and will do nothing to assist the industry that is already on its knees through no fault of its own.

"Advancing green credentials while decimating a sustainable transport service provided by private bus and coach operators around the country, makes absolutely no sense whatsoever.

"We are now demanding that action is taken to help the survival of our sector and ensure passengers can be assured of essential connectivity to work, college, school and hospitals coming out of this pandemic.

"This need is acute now more than ever given the fact Bus Éireann has ceased operations on a number of inter-city routes.

"We had asked for a fuel rebate scheme to offset any potential carbon tax increases but our pleas have been ignored."

Main image: A closed pub in Dublin city. Picture by: Sam Boal /

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Budget 2021 CRSS Covid Restrictions Support Scheme DIGI Donall O’Keeffe Hospitality Sector Liam Reid Licensed Vintners Association

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