When I spoke to hotelier Howard Hastings, we did not talk over coffee in the magical surroundings of his Ballygally Castle Hotel on the coast of Antrim or in the restored, Georgian townhouse The Merrion in Dublin, of which he is a major shareholder.

The Covid-19 lockdown would not allow either of these options, so we spoke on the phone. However, the hotel industry across the island of Ireland was preparing to reopen this summer.

Hotels in Northern Ireland will open on July 3, after it was decided to further ease of restrictions. It was originally decided that hotels in Northern Ireland would reopen on July 20.

“We obviously welcome the news that the date for opening our hotels has been brought forward and are hopeful that, by then, there’ll be clear guidance from the Executive on the social distancing requirements,” says Hastings.

Hotels in the Republic of Ireland can open slightly earlier on June 29.

Hastings is chairman of the Northern Ireland Tourist Board and managing director of Hastings Hotels, the largest independent hotel group in Northern Ireland. The group owns the Europa (which was bombed 28 times during the Troubles), Stormont Hotel (which was the first business venture for Hastings Hotels), Everglades and Slieve Donard Hotels, the Culloden Estate and Spa and Ballygally Castle. The group employs 1,200 full and part-time staff. The company also purchased the 1970s-style Windsor House in Belfast from Nama for £6.5 million in 2015.

Although he has a law degree from Nottingham University and is a chartered accountant, hospitality is in Hastings’s blood. His father, William Hastings, was a successful publican, like his father before him, and established the family hotel business.

When William Hastings had a heart attack, Howard Hastings decided to come home and help out with the business.

Howard was appointed operations manager in 1989 before taking over as managing director. He is the founding chairman of the Northern Ireland Hotels Federation and has been a member of Tourism Ireland, which was one of the cross-border bodies established under the Good Friday Agreement.

Hotels in the Hastings Hotels group are based in Northern Ireland, yet he knows what it takes to run a successful hotel in the Republic of Ireland, too, as a major shareholder in Dublin’s five-star Merrion Hotel.

With business on both sides of the border, Hastings sees how the UK government’s response to this crisis would affect his hotels in the North and how the Irish government’s response would affect his business in Dublin. He believes that the UK is in someway playing catch up with Ireland.

“The suddenness of the lockdown was really difficult for anybody to cope with. Again, both jurisdictions came up with plans to support the workforce, which were compulsorily laid off, if you like. The salary support scheme in the South and the furlough scheme in the North. That response, I think, probably has protected a lot of the jobs going forward. I suppose since then the South has been clearer with giving indications of its roadmap and its timescales for reopening, which sort of bounced the North into following suit,” says Hastings.

The Irish government has sped up the phased reopening strategy as pressure mounts from people in various industries who want to get back to work. Scientists say it could be too soon, however, and want the lockdown to remain in place. In Ireland, dozens of academics penned a letter calling for an extension of lockdown protocols. The country’s Chief Medical Officer Tony Holohan states that the government needs to “strike a balance” by reopening the country while preventing the spread of the virus.

“I think you can cope with it, but I don’t think the customer would enjoy it,” says Hastings about a one-metre social distancing measure.

The change in guidelines published by Fáilte Ireland on how the hospitality sector should reopen shows the impact lobbying can have when it comes to reopening the economy. One of the big takeaways from the original document was that all establishments in the hospitality sector must enforce a two-metre social distancing rule. Before the publication of the guidelines, the debate between one and two metres.

The World Health Organisation (WHO) maintained that a one-metre distancing rule would be enough to provide safety from the virus. At the same time, the European Centre for Disease Control (ECDC) stated that two metres was the safest option. Those in hospitality wanted a one-metre rule in place so they could bring in as many guests as possible. After weeks of discussion, new guidelines were published that stated a one-metre social distancing rule was acceptable for the hospitality industry.

Hastings’s preference, unsurprisingly, was not for two metres. “I think you can cope with it, but I don’t think the customer would enjoy it,” he says.

“Would you like to go to a wedding where there were four people seated at a normal six foot round table? I think the inability to generate the atmosphere in the room of a joyous nature of a wedding reception would be such that the bride and groom would themselves decide to postpone it until such times as the regulations had changed,” he adds.

Hastings believes “the height of the pandemic has passed sufficiently. The risk is less than it would have been a month or six weeks ago”. He states that a judgement call needs to be made about physical distancing to prevent a resurgence of infection while incorporating an atmosphere that approaches normality. He says that, on a personal level, he sees little evidence of reinfection.

“Although I’m not a scientist, I find it very hard to justify locking up an entire economy on the basis of such low numbers. These numbers are not borne from the success of the government locking down the virus in the first place. It’s the success of our physicians, the ability and willingness of our population to abide by the restrictions that were imposed on them,” says Hastings.

“I think you have to see not just through the scientists’ eyes, but perhaps through the customers’ eyes. It maybe is time for politicians to be brave enough to make that step to reduce the distance. But that’s one of those restrictions that you can’t announce that you will relax in three-weeks-time, because the moment you say that you’re making a relaxation of that rule, nobody heard the ‘in three-weeks-time’ that’s in the sentence,” says Hastings.

Hotels in Northern Ireland are out of Fáilte Ireland’s jurisdiction. Therefore, they are not obliged to follow any of its recommendations.

“We are watching closely what Fáilte Ireland is doing and watching closely what the Department of Culture, Media and Sport is doing, which is the Department for Tourism within the United Kingdom framework. We are also being guided by the medical advice given by the Northern Executive, who have got sort of three bites of the cherry to get this right in Northern Ireland,” says Hastings.

The domestic market is not enough

Hastings already sees a flurry in enquiries about bookings for his hotels. As international travel is off the cards for many this year, people across Ireland are looking to book so-called staycations over the coming months.

To entice people to book a stay somewhere in Ireland, Fáilte Ireland launched a new domestic marketing campaign. “Ireland, make a break for it” is costing €2.5 million. Fáilte Ireland is also introducing a “safety charter” for those in the hospitality industry to display and give customers confidence that all measures are in place to stop the spread of Covid-19. The initiative costs €1.5 million. An establishment can only display the stamp if they adhere to Fáilte Ireland’s guidelines and all its employees participate in an infection control programme.

“I think when dates were announced, there were obviously people who were very keen to secure their holidays and it may well be that they’ve already had to change their initial original holiday plans and they just want to get something in the book. So, as with the South, there was a surge of excitement, of course. Normally we don’t expect that at this time of year, because at this time of year, a lot of people have already booked their summer travel plans that were for us and for others. A lot of the bookings we would have had in place would have been from international visitors more than from domestic visitors,” says Hastings.

If holiday goers must remain in Ireland, they may spend what they usually would abroad. Meaning the domestic market could generate billions for the hotel industry in 2020.

“The island of Ireland, generally year on year, spends about €4 billion on outbound travel. So that is the size of the prize that remains for the hospitality industry North and South for the remainder of this summer season. That’s obviously why the sector is so keen, north and south, to try and get reopened as well as they can for the summer. Some of that €4 billion that would have otherwise left Ireland,” says Hastings.

Although €4 billion in tourism spending is available from Irish people, Hastings echoes the consensus of fellow hoteliers that the domestic market will not be enough for the hotel industry to thrive, regardless of where the hotels are on the island. A lot of that money will be spent in restaurants and cafés in towns and villages where people have their holiday homes and not in hotels. Besides, there are not enough people in Ireland to make up the numbers that would usually travel into the country. Hastings says that his hotels will also lose out on high-yielding international customers like North American golfers.

“The domestic market won’t be enough, I’m afraid, because when you think that 30 million passengers go through Dublin Airport alone every year, and we are sitting on an island of almost seven million people, a lot of them have second homes or caravans or camps or whatever. The totality of that market is not going to be availing of by the licensed hospitality trade,” he says.

“We already operate at a huge Vat disadvantage to the South. So, it’s obviously something that would have to be lobbied for. “

Howard Hastings

As well as a year-long absence of international holidaymakers and corporate visitors for 2020, the cancellation of events across the country will also hit the hotel industry. The lack of festivals, concerts, sporting events that would generate guests will not help the market, according to Hastings.

Some hotels may be in a position to readjust their rates to entice more domestic customers to say with them. At the same time, though, with social distancing in place, capacity will be affected and hoteliers need to save money where they can.

“The constraint is going to be, can you, with the social distancing, offer all your bedrooms for sale if it’s going to cause problems in the restaurant, problems in the lifts, problems in the spas. So, I think that in all likelihood, when we work through the restrictions in the short term on business, a lot of hotels will not be able to offer their full complement of bedrooms. Therefore, to cover their costs, I think they’ll need to be looking for prices that are not what you might describe as bargain basement, but prices that will enable them to trade profitably, given the extra costs that they have to bear,” says Hastings.

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Like with so many businesses right now, cash is everything. As business operations came to a sudden stop during the lockdown, so did cashflows. With costs still building up, businesspeople needed to turn to the government and the banks to secure working capital. Hastings is no exception.

“In Northern Ireland as part of a UK system, there were government-backed loans for businesses, as with so many other enterprises. Our overdraft has gone up substantially, and in order to see ourselves through, we’ve had to avail of those government-backed loans as part of the Covid process,” says Hastings.

“Like all businesses at times like this, it’s not even the profitability that you’re looking at, but how well you can conserve cash within the business when there is no money coming in. A lot of money is still going out on the essential repairs and maintenance to secure the property and keep it sound and to process the changes in the bookings. Some weddings are moving their dates for a second and third time now. So, this requires manpower on site. So, all those costs are running on. The challenge has been how to protect the hotels as best one can when then they reopen that they are ready to go back to business while at the same time not incurring more costs in doing so than you need to,” says Hastings.

The question is, how is the hotel industry supposed to stay afloat? Hastings believes government intervention and assistance is the only way hotels in both the North and the Republic of Ireland can remain open.

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One measure introduced, both in the UK and in the Republic of Ireland, is payment schemes for people who are currently unemployed due to Covid-19. Hasting says that the furlough scheme in the North is a significant help for his business.

It will run through August, September and October on a tapering basis, which means that the hotels and other hospitality businesses that are reopening can avail of staff on a part-time basis. Therefore, hoteliers are not obliged to bring back their full staff for hotels that may not necessarily be as full as they usually would be. In the Republic, the Covid-19 wage subsidy scheme is running until August.

Hastings says that the relief on rates for businesses, a measure introduced in both jurisdictions, is hugely welcome. However, governments now need to figure out how to create assistance that is more sector-specific.

“Rationing continued in the United Kingdom for a further eight years beyond the end of the Second World War. It was easy to bring in. It was hard to let go of again,” says Hastings.

“In the knowledge that it really will take well into next summer before I think things get back to normal in terms of international travel, it would be perhaps wise of the government to contemplate extending those rate holidays, even on a tapered basis, right into next season and beyond,” says Hastings.

Of course, when talking about the hospitality industry, the Vat rate will ultimately be brought up. After the 2008 financial crash, the Republic of Ireland decreased the hospitality rate from 13.5 per cent to nine per cent. In the 2018 Finance Bill, the hospitality Vat rate went back up to 13.5 per cent.

The increase created a substantial financial burden on businesspeople in the sector, even before the pandemic. It caused many to pull down their shutters for the last time. The Vat issue is not isolated to the Republic of Ireland, however. In the North, the Vat on all hospitality is 20 per cent.

“We already operate at a huge Vat disadvantage to the South. So, it’s obviously something that would have to be lobbied for. It would be very welcome if some concessions were made to hospitality to acknowledge the current perils of that sector,” says Hastings.

He believes that any headway on reducing Vat on hospitality is more likely to happen with the Irish government than with the UK. “I’m just not quite sure that the hospitality sector is as prominent in the minds of policymakers in Westminster as it does in the minds of the senior politicians in government in the Republic of Ireland.”

Light at the end of the tunnel

“I believe that, despite some people loving living on Zoom, others have grown fatigued of it and I do believe that conferences will be back on the agenda within a couple of years,” says Hastings.

In the nearer future, Ireland still has the opportunity to capitalise on assets like golf and unspoiled natural landscapes which it has in abundance, both in the North and South, he adds. It has long been the desire of Fáilte Ireland and Tourism Ireland to get people to visit other parts of the country, instead of people concentrating their visit on Dublin.

“Tourism Ireland is ready to make sure that they go back into the market at the earliest opportunity as international flights resume, in order that Ireland can regain not only its existing share but hopefully to grow its share of the international markets coming into the island of Ireland,” he says.

Hastings is positive that people will visit Northern Ireland, due to their handling of the pandemic. “Certainly, Northern Ireland has been very good during the pandemic in minimising the loss of human life and the spread of the virus, and we have a good story to tell as we come out the other side. Therefore, it can hold its head up high as it goes back into the market.

“Surveys suggest that a reported 2.5 million inhabitants of the Republic have never spent a night in Northern Ireland. We plan to take full advantage of this opportunity with preparations well underway to welcome staycationers from across the island of Ireland,” says Hastings.

The hotelier uses a historical example when explaining how long we could be living with these restrictions.

“Rationing continued in the United Kingdom for a further eight years beyond the end of the Second World War. It was easy to bring in. It was hard to let go of again,” says Hastings.