Kroll recently conducted a survey in association with the Restaurants Association of Ireland on 2022 business sentiment for Ireland’s hospitality sector.
Kroll surveyed over 150 members of the Restaurants Association of Ireland across different areas of the hospitality industry and found overwhelmingly that COVID-19 business support is still necessary to return to pre-pandemic profits and manage increased operational costs. The survey indicates that withdrawing government support, as early as this summer, will have a negative impact on short-term recovery. 96% of restaurant and hospitality business owners felt the current reduced 9% VAT rate should be retained.
The restaurant and hospitality sector is optimistic on growth, but some may need to consider restructuring or rightsizing their business to reach pre-COVID profitability. The real lasting impact from the pandemic will be felt when government support is completely withdrawn over the next few weeks. Reverting to a higher VAT rate of 13.5%, less than a year after a lower rate was introduced to help boost the sector, will only serve to put undue pressure on an industry that was one of the hardest hit by restrictions during the pandemic.
The survey also examined the sentiment from hospitality managers about the current workforce. It found 61% of restaurant owners believed that staffing would pose the biggest challenge in the future, alongside 81% saying that wages will need to be increased to retain employees. Nonetheless, 66% of respondents said that they believed their businesses to be economically viable, notwithstanding the commencement of the withdrawal of restrictions put in place to stop the spread of COVID-19 throughout 2020 and 2021.
Some of the additional key findings from the survey include:
- 74% of survey respondents felt that government support for the restaurant sector since March 2020 has been sufficient
- 86% of hospitality managers said that their businesses would not have survived the pandemic without government support
- 49% of business owners felt that they did not receive adequate support from their bank or finance provider
Our clients in the hospitality sector across hotels, restaurants, cafes, gastropubs and bars have chosen to restructure their businesses through both formal and informal processes. Now that the hospitality sector is fully reopened, businesses are looking for support to strategically navigate the impacts of the COVID-19 pandemic.
Our experts are available to confidentially discuss any business restructuring requirements you may have.