Six days before Thursday’s announcement by Taoiseach Leo Varadkar that schools, colleges and cultural institutions would close, the owner of the Dublin-based two Michelin star restaurant The Greenhouse, Eamonn O’Reilly, had called out the authorities and lobby groups about their handling of the situation in comments published on Twitter.

“Restaurant cancellations along with a massive decline in future bookings mean our restaurants are on the edge, we’re now surviving on Friday & Saturday business only & I’m sure many others are in the same situation,” O’Reilly wrote in his first tweet. 

“I’ll probably get lambasted for this as we do not take part anymore in these RAI awards because it’s so flawed, but the RAI should scrap their forthcoming awards & concentrate all their efforts, time & their money in helping their members survive this,” he continued. The RAI’s Ulster Regional Awards took place on March 10, but following the government lockdown, the organisation has decided to cancel the two upcoming Regional Awards in Connaught and Munster. 

Varadkar said that restrictions are now placed on public gatherings and he urged businesses to allow employees to work from home where possible. Shops, cafes and restaurants are allowed to stay open if they wish, yet the public is being advised to avoid social interactions. 

This stops short of meeting O’Reilly’s expectations. “Government TDs need to stop talking & debating on tv & radio. Step up to the plate and lead, measures can be implemented now to save businesses & jobs, for a start put the vat rate back on Monday to 9% even if it’s just until confidence improves & we get through this mess,” he tweeted. 

Although Saint Patrick’s Day would have been a cash boost for many, O’Reilly echoed what many others in the restaurant business were saying when he wrote: “Finally, for the love of god can someone please have the cop on and cancel St Patrick’s Day”, before the official cancellation announcement was made on March 9. 

“This is not about making money. It’s about existing.”

Restaurateur Paul Flynn

The serious infectiousness of the virus is not lost on those in the service industry, but they are looking for insurance that once they can return to business as usual, they will not be under further financial strain. 

The impact took its toll on O’Reilly’s business when he announced that the sister restaurant to The Greenhouse, One Pico, closed for the night on March 10 because it had zero bookings. 

“We’ve been decimated by cancellations today & we will be over 80% down for this week,” he says. 

O’Reilly’s scathing back-and-forth with the authorities reflect the rippling effects of the coronavirus across the restaurant sector elsewhere in the country. 

Culinary director of EatGalway Restaurant Group JP McMahon says the virus has affected business and that he has had many cancellations because of it. Aniar, a Michelin star boutique restaurant in Galway, is part of this group and McMahon believes it may be particularly impacted by the virus.

“I think all restaurants will find it difficult but many of our customers in Aniar are American so we may be very affected by the down downturn in tourism,” says McMahon.

240 cancellations in a fortnight

Dublin-based Dax restaurant also expressed frustration at the impact the virus is having on their business.The French/Irish cuisine restaurant, which won Best Restaurant 2019, said on March 11 that the insurance company for the business would not cover it if it was forced to close down by order of the government. 

This was response to comments by president of the RAI Mark Corcoran, who told restaurants that keeping track of cancellations during this time is important when seeking compensation. 

Dax has been significantly hit by people not coming into the restaurant due to the rise of coronavirus, owner of the restaurant Olivier Meisonnave told The Currency.

“Corporate business is dead,” he says. 

Dax received 240 cancellations in a fortnight. On March 12,  the restaurant had 22 cancellations in the one day.

Meisonnave says that weekends are still doing well. If he has to start cutting down on hours trading, he said he will close the restaurant from Monday to Thursday. In the meantime, he is cutting down on food and wine orders. 

Deciding whether to close for two or three weeks during the lockdown is a tough one, says Meisonnave, highlighting the fact that he still has bookings. 

“My mind has been spinning,” he says.

He also predicts that the current coronavirus situation could drag on into September, a date that is going to be difficult for many businesses. 

Elsewhere in the country, the owner and chef of the Tannery Townhouse in Waterford, Paul Flynn, says he is feeling worried. 

Flynn did not think there was a need to join the hype around the virus last week. He says he now thinks differently. 

“Every day unfolds, rather than something you control,” says Flynn. 

He says that his business has not been hugely impacted because it does not rely heavily on corporate bookings, but assistance needs to be put in place for those in the service industry right now, such as decreasing the Vat rate. 

“This is not about making money. It’s about existing,” he says. 

Flynn touched on the vulnerability of small business as well as those that are more upmarket and that no one is giving smaller enterprises a lifeline during this uncertainty. 

“This is new territory and we just need to help each other,” says Flynn. 

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Aside from restaurants, other players in the service industry are being impacted by the coronavirus, including hotels. 

Hotels were facing their own troubles before the virus. The 4.5 point Vat increase and the additional supply of about 1,500 bedrooms in Dublin created tough conditions in the market. However, Ireland’s largest hotel group, Dalata, was not feeling the pressure. 

Last year was a good year for Dalata. Its share price rose after it recorded higher revenues and pre-tax profits.  Its revenues for the year to the end of December rose by 9.3 per cent to €429.2 million.

There was no material impact from the spread of coronavirus on Dalata’s business, according to CEO of Dalata and president of the lobbying group Ibec Pat McCann in comments he made earlier this year. Now, McCann is being more cautious in the wake of the lockdown. 

McCann stated he would not be making any further statements at this time on his business and the impacts the coronavirus may be having on it. He explained his reason for not commenting is because everything he says is a statement to the market. 

He added that once people know what’s happening, he will comment further at the end of the month on the issue. 

For now, he says that we need to focus on “how we can all manage this together”.

The luxury Ashford Castle hotel in Co Mayo has not been hit with a huge number of cancellations relating to coronavirus just yet, but its management is still wary of the current circumstances. 

Ashford Castle is still benefiting from both new and repeat business, according to its general manager Niall Rochford. 

“However, like every other hotel in Ireland, we are monitoring the impact of Covid-19 on both short and medium-term bookings,” says Rochford. 

“We have had some cancellations from overseas guests, but this is totally understandable in these challenging and unprecedented times,” he adds.

Staff concerns

A waiting staff member in one of the most upmarket restaurants in Dublin told The Currency that in the last couple of weeks, they have seen numbers drop on larger parties, particularly the corporate clientele. Yet, Friday and Saturday’s business has remained unaffected, according to the source. 

“We are one of the lucky restaurants in the country in that we have a very large customer base,” says the source. 

The waiter added that employees of the restaurant are no longer shaking any other staff or guests’ hands “which can be difficult for our regular guests”.

They said that sanitizers have been placed in all staff areas and they are washing their hands up to 15 times per day. 

“We have been told to be ultra-careful,” says the source. 

There are worrying times ahead, particularly the loss of business on St Patrick’s week. “I do feel for the smaller restaurants in the country and know that many people’s hours have been cut. Ours hasn’t,” the waiter adds.

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Other areas in the hospitality industry are also at high risk of being seriously affected by poor control of the coronavirus. For example, members clubs where the fee is quite hefty and the membership is typically over 60 years of age, the demographic most likely to become seriously sick from the virus.

It’s sort of the unspoken fact that if this gets as bad as Italy, everyone is going to be looking for a new job

Senior staff member at a popular members club in Dublin

“This obviously puts them in the ‘vulnerable’ sector of the coronavirus, I mention this because ultimately if the virus spreads, like in other countries, we will have to close,” says a senior employee at a popular members’ club in Dublin.

The source says that if there is a threat of coronavirus infecting members of the club, there won’t be any partial opening.

“It’s frankly too risky for our customers, one person infected could potentially wipe out our membership. A bit morbid, but unfortunately it’s the reality of the scenario,” says the source.

They added that if a closure happens, it would have a drastic impact on the finances of the club for years.

“The fact is, if we close for any extended period of time, or if the virus dramatically affects our membership, people are going to lose their jobs. The majority of our staff are paid hourly, by hours worked”, says the source. This means that if staff don’t work, they don’t get paid. The source added that their employers do not offer sick pay. 

“It’s sort of the unspoken fact that if this gets as bad as Italy, everyone is going to be looking for a new job – not only that, but if they get sick, they will have no income whatsoever. Unfortunately, this is just the reality of most people in the hospitality business,” says the source. 

While there is a lot of speculation within the workplace, the source said that management have yet to make an official announcement on how they are going to conduct business if the spread of the virus gets worse. 

“Our own business runs on a tight staff roster already, if a majority of them are self-isolating, I honestly don’t know how we will react. I can’t see us operating as normal but there is no plan from what I can see,” says the source. 

In this particular hospitality business, they have taken some measures to protect their staff and members. Management installed eight different hand sanitizers around key points in the building including entrances and tills.

Thousands of jobs lost by May

“Our industry is going to get really, really hit over a short period of time,” says Adrian Cummins of the RAI who predicts that 20,000 jobs at least will be lost from the hospitality and tourism industry by May 2020 “if the government doesn’t intervene.”

“Businesses won’t be able to sustain the lack of customers going through their doors,” he says.

He suspects many in the industry will have to change their business model and reduce staffing levels to cope with the impact of the virus.

The government has introduced a contingency fund to help those affected by coronavirus cope. 

If you’re home for two weeks, you’re not going to consume two weeks of restaurants, two weeks of cinema, two weeks of frappuccinos when you get back from isolation

Professor Brian Lucey

Another initiative introduced by the government was a package of reforms for sick pay, illness benefit and supplementary benefit that is designed to ensure that employees and the self-employed can abide by medical advice to self-isolate where appropriate. Cummins says that this is welcomed. Especially as an employee usually only receives sick pay in the service industry if it is part of their contract. The majority of service industry employers do not provide it. 

“There is an emphasis on protecting staff, however, because they don’t want staff migrating to other sectors that they can’t get back in,” says Cummins.

The sick pay reforms are a step in the right direction, but for Cummins they are not enough.

“We need direct financial support specifically targeted for the hospitality industry. So, what does that mean? We need the Vat rate reduced immediately. We need the employer’s PRSI to be reduced immediately. We need direct financial assistance for businesses that can’t make their repayments to the banks and if the banks don’t play ball or the Revenue Commissioners don’t play ball with our sector, that will have a huge knock on effect,” says Cummins.

Ideally he wants the Revenue Commissioner to advise business owners that they can defer their tax payments until the later on in the year, such as late summer, to help with cash flow. 

“Case by case doesn’t work. It has to be a blanket approach to this. Otherwise it will be catastrophic for our sector,” says Cummins. 

He made the point that many who benefit the most from Ireland’s hospitality industry are small rural villages and towns that are dependent on tourists and could be hit the most.

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If establishments are forced to close or employees are required to self-isolate for the recommended time of two weeks, that’s when the effects of the coronavirus will be felt on business. 

“If you’re home for two weeks, you’re not going to consume two weeks of restaurants, two weeks of cinema, two weeks of frappuccinos when you get back from isolation,” says finance professor at Trinity College Brian Lucey, who believes the demand shock will be worse than the supply shock on business during the coronavirus crisis. 

He echoes Cummins by saying that more needs to be done to help businesses get through this tumultuous time. He believes more rapid decisions need to be made by the banks on what they are going to do to help. Ulster Bank and Bank of Ireland recently announced they would allow a three-month mortgage repayment holiday for those affected by the spread of the virus. 

“The problem we have at the moment is we have a lot of businesses in Ireland which are only just back to full tilt after the austerity and crisis period,” says Lucey. “They may not have the cash reserves, they may not have the bank facilities to tie them over for two, or three or four weeks when they’re either closed or while the country is working out what it needs to do,” he says.

Lucey wants to see Revenue “cut people some slack” if they miss filing deadlines or if they have been impacted by the virus in some way, He says there needs to be clarity on whether insurance companies will say that the coronavirus is ‘an act of God’ and won’t cover some people. 

He also believes the government needs to work with the banks to make sure that liquidity is in place. Minister of Business, Enterprise and Innovation Heather Humphreys announced this week that “there are a number of schemes that can help them [businesses] meet their short-term working capital and liquidity needs”.

The struggle for many in the service industry is not knowing what to do and being left adrift. Little has emerged from the government on how people should conduct their business day to day while the virus continues to spread. 

Initiatives from the government

The government recently introduced a €200 million Strategic Banking Corporation of Ireland (SBCI) Working Capital scheme for eligible businesses impacted by the coronavirus. Although the government stated these applications could be found online, they are yet to be made available. 

Loans of up to €1.5 million will be available at reduced rates, with up to the first €500,000 unsecured. 

A €200m Package for Enterprise Supports including a Rescue and Restructuring Scheme is available through Enterprise Ireland for vulnerable but viable firms that need to restructure or transform their business. 

The maximum loan available from MicroFinance Ireland will be increased from €25,000 to €50,000 as an immediate measure to specifically deal with exceptional circumstances that micro-enterprises, like sole traders and firms with up to nine employees, are facing. Applications can be made online or through the Local Enterprise Office. 

The Credit Guarantee Scheme will be available to coronavirus impacted firms through the Pillar Banks. Loans of up to €1 million will be available at terms of up to seven years.

The lockdown started at 6pm the March 12 and is expected to end on March 29 – for the time being.