Not much changes at the 123-year-old Park Hotel in Kenmare. That’s part of its charm. 

So the challenge for owners John and Francis Brennan is to make social distancing procedures as invisible as possible. This means a new doorman (so guests don’t touch the front door), personalised menus (so guests don’t have to share), and a behind-the-scenes alarm clock that goes off every 15 minutes to remind staff to wash their hands. 

“We have to disguise all the protocols that we have to put in place,” says John Brennan.

John and Francis Brennan will be ready to welcome guests once more towards the end of July, when hotels are earmarked to start trading again. They, along with every other hotel in the country, have been closed since March. 

Across the industry, hotels are making more changes in preparation for re-opening.

“The hotel will operate a pre-booking process for all experiences throughout the hotel, ensuring all customers who have access are to receive a seated experience hence minimising queuing,” says JP Kavanagh, general manager of The Shelbourne in Dublin. “All operational standards of operating procedures have been reviewed and reworked to ensure we are providing a luxury service experience while adhering to social distancing and increased hygiene practices.”

Hoteliers such as Tom Randle, owner of Randles Hotel in Killarney, Co Kerry, believe the emphasis is on enhanced sanitisation.

“Normally, we would clean our ground floor on rotation every two to three hours. We will now be sanitising our ground floor every 30 to 45 minutes. Bedroom cleaning is going to be much more intensive. Obviously, all areas were cleaned, but there’s a lot more procedure in terms of how the housekeeper disinfects a room, how the housekeeper cleans the room, how the housekeeper keeps herself safe when she’s in the room,” says Randle.

How food and beverage are served, one of the core practices in the hospitality industry, will also be different in hotels to prevent Covid-19 from spreading. For example, the cold and hot buffet looks like it will not exist in hotels as long as Covid-19 continues to spread at the rate it does.

“Your breakfast, your cereals, your juices, your teas, your coffees will all be fully served to you at the table. Which, being honest with you, is a throwback to earlier days and it was a very nice style of service. But again, you look at the very big properties that have big buffets and hot buffets, it’s going to be a challenge for them,” says Randle. 

“You take that in any sort of business, any sort of life, if you don’t have activity for 19 months. It’s just absolutely brutal”

Tom Randle

Operating a larger hotel could be beneficial in the coming months. The Cliff Townhouse in Dublin has three floors of dining space, high Georgian ceilings and full length sash windows create an area that is easy to air. This extra room will make it easier to welcome guests while enforcing social distancing.

“Social distancing will continue to be a feature of life until a vaccine has been developed and is widely available, so we have to pivot and work to the new way,” says Honor Byrne, Cliff Townhouse commercial director.

While hoteliers around the country are thinking of creative ways to re-open and co-exist with this virus until a vaccine is found, they’ve also had to make difficult decisions. 

“We have had to temporarily lay off 90 per cent of our workforce during the closure as a result of this, which is very hard on our staff,” says Ger Alley, the general manager of The Heritage in Killenard, Co Laois.

Even when hotels do re-open, a burning question remains. Can the hotel industry thrive under these conditions?

According to a range of people working in the industry, two factors will decide the fate of hotels post-lockdown. The first is the strength of the domestic market. The second is whether sufficient financial assistance from the government is made available.

The domestic market

International travellers spread the virus from Wuhan, so travel is expected to be one of the last aspects of life to return to normality. This is a huge problem for the hotel industry.

John Brennan is optimistic about Ireland’s domestic market, though, and believes Irish hotels are in a better position than those in holiday destinations.

“If you owned a hotel in the Maldives, or if you owned a hotel in the Canary Islands, you have a nightmare because everyone has to fly to it,” says Brennan.

He predicts that the only market for Irish hotels will be the domestic one for about 18 months.

Brennan is on the board of Relais & Châteaux, an association of individually owned and operated luxury hotels and restaurants in Europe, Africa, Asia, and North America. Every Thursday morning, he and around 100 other hoteliers linked with the association have a Zoom call. In the last call, the message was clear: “There is no market anywhere in the world except the domestic market.”

“Our business for 2019 was 80 per cent domestic so that can only be positive. We have seen good interest from the domestic market and I think once the government says it’s ok to start travelling within Ireland again people will be happy to do so,” says Alley.

“Everybody in Kerry is in the tourism industry somewhere or other”

Tom Randle

Randle does point out that although there may be more domestic visitors, they will not fill the void left by the international traveller for most hotels.

Many may still feel uncomfortable about staying in a hotel without being vaccinated against Covid-19. The expected recession won’t help either.

Hotels will need to offer incentives to encourage people to stay. Sales and marketing director of the Choice Hotel Group Marie Richardson says that larger discounts for longer stays will be given to entice people into the group’s hotels, including The G Hotel & Spa, The Hardiman, The House Hotel, all of which are based in Co Galway. Hotel Woodstock in Ennis, Co Clare, the Shoreline Hotel in Co Dublin, Malone Lodge Hotel in Belfast, and Croydon Park Hotel in Croydon, London are all part of the group.

Financial assistance

Even if people living in Ireland flock to hotels in droves once restrictions are eased, hotels will have lost four months of business if they open in July. These are four of the busiest months of the year in hospitality.

“Traditionally St Patrick’s Day is the beginning of your season. So that’s where we were sort of starting off. We were ready, we were painted, we were nice and shiny, ready for the season. We were ready to go,” says Randle.

He says the turnover for his hotel will shrink by a seven-figure sum due to the lockdown. 

“Even when it [Randles Hotel] does operate again, it’s only going to operate at 30 to 40 per cent of its capacity. And those months of July, August, September are absolutely key to us. June, July, August, September, we would do 60 per cent of our annual revenue. That’s pretty much goosed at this stage,” says Randle.

Carol Barrett, the owner of Dunmore House hotel, says it has received no source of income during this period of Covid-19.

“Our staff, except for five, are in receipt of the government payment of €350. We also receive assistance for staff still working in-house for wage costs from the government scheme. The only payments received since March 15 are four wedding deposits totalling €8,000,” says Barrett.

Richardson adds that the Co Galway-based hotels that are part of the Choice Hotel Group had been looking forward to an exciting summer with the Galway 2020 European capital of culture initiative.

*****

At the start of the lockdown, some hotels stayed open for a short while longer than other. Brennan kept the Park Hotel open as he still had international travellers checked in – the last he may see for a while.

“We stayed open two weeks longer than most hotels because we had American guests staying with us,” he said.

There was a second reason Brennan stayed open. He didn’t want to close before he was officially told to, from an insurance point of view.

“So technically, we didn’t close voluntarily, which a lot of places did, although the government requested that places close but they didn’t actually tell them to,” he says.

Insurance cover has been a contentious issue for many in the hospitality sector over the course of the lockdown. Recently, four pubs took the insurer FBD to court for refusing to cover them during this crisis. Brennan makes his own thoughts clear on what is happening with insurance companies at the moment.

“In a pandemic, if the insurance companies were to cover everything for everyone, they’d be gone out of business. So, there are two sides to every story. Our insurer has been very good to us on policy renewal for next year. As far as I’m concerned, that’s fair enough,” he says.

Others will go more than four months without business, and the financial strain will be much greater.

“A Vat reduction isn’t worth the paper it’s written on. A simple reason is we have no turnover. You only pay Vat on turnover.”

John Brennan

Barrett’s hotel closed on March 15, only just after it opened for the season on March 10. It hosts approximately 80 weddings per year and 85 per cent of these have transferred to 2021. 

“We have also had five cancellations and these couples expect a return of their deposit, so we already begin our late season with a further added debt of €10,000,” says Barrett. 

Some hotels open on a seasonal basis, remaining in hibernation as they await the summer months. Those hotels will be without business for over a year.

“Businesses are on their knees,” says Randle.

“This year has been a complete write-off. Many properties haven’t even opened. Many properties won’t even reopen. If you look at Kerry, you would have had operations that closed last October and will not open this year. They could be looking at a closure period of 17, 18, 19 months. You take that in any sort of business, any sort of life, if you don’t have activity for 19 months. It’s just absolutely brutal,” he adds.

The relationship between suppliers and hotels has been an important one through this lockdown. Many have recalled their stock and offered hoteliers credit for when they re-open once more.

“Guinness and Heineken, in particular, were immediate upon this. Some of the other suppliers, maybe not as easy with them, but certainly I’d give credit to Guinness and Heineken because they were very rapid to come out and give us support in that respect. At least we’re not losing the kegs. Any beer that’s out of date, we’re not losing that. So that’s what’s important to us,” says Randle.

*****

The hospitality industry will not thrive on its own and is looking to the government for assistance.

Fergal Harte, general manager of The Kingsley Hotel and Chair of the Cork branch of the Irish Hotel Federation (IHF), says hotels are lobbying the government for a number of supports. They include a direct business grant scheme, a zero per cent interest on government-guaranteed finance and a government-supported scheme for deferral of capital and interest payments for a period of one year. The group is also looking for a continuation of the job subsidy scheme for tourism and hospitality during the crisis.

“Businesses will be operating at severely constrained levels of activity when they re-open. The Covid-19 Wage Subsidy Scheme should be continued until the impact of physical distancing and mass gathering restrictions has abated,” says Harte.

“Things like the government wage subsidy scheme have been brilliant and allowed us an opportunity to bring some of our team back from an insurance requirement perspective. We were required to have somebody on site all the time,” says Elaina Fitzgerald, President of the IHF and Director of her eponymous family-run Fitzgerald’s Woodlands House Hotel & Spa.

Fitzgerald is following in her mother’s footsteps as Mary Fitzgerald became the first female president of the IHF at the beginning of the 21^st century. Mary took on the role when tourism was facing the crises of the Foot and Mouth outbreak as well as the fallout from the 9/11 terrorist attack.

“In a pandemic, if the insurance companies were to cover everything for everyone, they’d be gone out of business.”

John Brennan

The IHF wants a three-month waiver on local authority rates for tourism businesses for a minimum of 12 months. After the three-months, the payment of local authority rates should be based on reduced levels of activity due to the Covid-19 crisis, says Harte.

Another key issue for the IHF is the permanent reduction in tourism Vat. The hospitality sector was calling for the Vat rate to be reduced before Covid-19 hit, as it was one of the main contributing factors that caused many restaurants to pull down their shutters.

The Vat rate was reduced from 13.5 per cent to nine per cent after the 2008 crash to help those suffering from the economic blow in the hospitality sector. Then, as part of the Finance Act 2018, Vat was put back up to the Celtic Tiger rate of 13.5 per cent. Ireland’s hospitality Vat rate is now higher than that of 28 other European countries.

The IHF believes that the permanent reduction in the Vat rate is required to assist recovery and secure a viable future for tourism.

Brennan does not believe a reduction in Vat will give hotels salvation in this crisis.

“Every press release coming out from the industry is about a Vat reduction. In 2008, a Vat reduction saved the Park Hotel from going into liquidation. No question about it. It, The Gathering, the Wild Atlantic Way where the three things that saved The Park from closing permanently,” he says.

“Today, in my mind, at this particular time, a Vat reduction isn’t worth the paper it’s written on. A simple reason is we have no turnover. You only pay Vat on turnover. We have no business. The one thing the country needs now is a stimulus to get people to go out and spend. That’s what we need,” he adds.

Even if a Vat reduction isn’t introduced, it’s clear the industry is clamouring for some sort of governmental support.

“If the government doesn’t support us and we are specifically badly hit in tourism, Kerry is tourism, so we’re extremely badly hit. We’re a huge employer. And it’s going to have huge knock-on effects. People not working, not purchasing. Everybody in Kerry is in the tourism industry somewhere or other,” says Randle.

Whether the hospitality industry will thrive in the ‘new normal’ “will be based upon the market and it’s hard to predict what this will look like,” says Fergus O’Halloran, General Manager of The Twelve in Co Galway.

“Naturally, there will be higher operating costs so all the support available will be required. We are optimistic yet nervous,” says O’Halloran.

Awaiting regulations

The government has not yet communicated how it expects hotels to operate after lockdown.

“The details haven’t been released yet, but there are no capacity constraints on accommodation. The 77 rooms that we had filled last year, we, in theory, can fill those again. Really where the capacity changes are going to be on what we call a ground floor, and that’s in the service of food and beverage and things like that,” says Randle.

“Luckily enough, we’re a luxury hotel, so we do have space. While we will lose some tables, we will lose some seating capacity, we’re not like a cosy little pub. We’re more nice, relaxed drawing rooms and areas like that. So. it will affect us, but not as much as a small pub. And again, as of yet, there are no guidelines to capacity constraints in terms of people staying in the hotel,” he adds. 

Fitzgerald says there’s huge anxiety around guidelines and it’s adding to the lack of clarity around how the hospitality sector will cope through Covid-19.

“There is no market anywhere in the world except the domestic market.”

John Brennan

“But they have to be as right as possible when the time comes,” she says.

The reason why they’re not released yet is obviously because they’re not at that point,” adds Fitzgerald.

One of the main things hoteliers need to know how to handle in the age of Covid-19 is weddings, which are the bread and butter for many hotels. 

“Irish people, by their nature, are very sociable. You think of an Irish wedding, it’s not like anything you ever see overseas. So, there’s a lack of clarity around what constitutes a small social gathering, what constitutes a large social gathering,” says Fitzgerald.

“Until we get clarity on the basic re-opening principles, I don’t think we can really start to build on that,” she adds.

Before Covid-19 hit, Fitzgerald’s hotel was meant to host 135 weddings this year, which is one wedding per day. That represents 36 per cent of its overall business. Between the 12th of March and the end of stage five of the government’s roadmap, dated August 31, 75 couples who arranged to have their wedding in the Woodland House Hotel will be affected.

The highs and lows of hoteliers in Ireland

Becoming a hotelier was an attractive option for tax-astute business people in the early noughties. Through Section 217, the government allowed you to build a hotel and write off the capital expense against tax. Consequently, the number of registered hotel rooms in Ireland doubled to 51,000 and the number of hotels grew to 896 during the boom times. 

There was such a scramble to meet the tax break deadline that by Christmas 2005, 217 planning applications were lodged for hotels. 

Then 2008 came and the economy went bust. Tourism was one of the sectors that suffered the most. One out of six hotel rooms in the state was controlled by a bank.

The hospitality industry suffered a great deal of heartbreak over the last decade. Yet, in recent years, the cranes returned to the skies of Ireland’s cities and hotels were being built once more to meet the demand. 

Before Covid-19, one in every 10 jobs worldwide was related to tourism, and the industry in Ireland was made up of around 260,000 people.

“Hospitality has always shown its resilience and with the correct supports and structure for the next 12 months it will adapt to survive,” says Byrne.

Time will tell how many hotels will have to check-out of the market due to the impact of the global health crisis.