Budget 2021 a step in the right direction, but not far enough for hoteliers
Neil Grant said he is "reasonably happy" with supports for hotels in today's budget. Picture: Eddie O'Hare
Budget 2021 has not gone far enough to prevent hotel closures, but they have been given "a fighting chance" as a result of today's measures, according to Neil Grant of the Celtic Ross Hotel, Cork.
Mr Grant said he was "reasonably happy" with measures introduced today and wanted to be positive, "but I don’t think we can kid ourselves that there’s enough in it to say hospitality businesses are safe yet".
"I don’t think it’s gone that far," he said.
Mr Grant said the waiver on commercial rents was vital, but he feels it should be extended beyond 2020.
“People are still going to be significantly in debt next year," he said. "Business might not bounce back until March or April, so they could have added six more months."
“But at the same time, they have been changing as they go,” he said, alluding to the fact that commercial rent holidays could be extended if it is deemed necessary.
He also welcomed a reduction in the VAT rate from 13.5% to 9% for the hospitality and tourism sectors, which he deemed a "no-brainer".
"I would say it's not gone far enough in the sense that there’s not going to be much overseas businesses next year," he said, explaining that the Vat reduction will be needed beyond 2021 to help the sector to recover.
He said he is awaiting further details on the Covid-19 Restriction Support Scheme “with bated breath”.
Mr Grant said that he would not go as far to say he is disappointed with today’s budget, saying: “I don’t think that’s fair.”
“I think there’s enough to get us through a short period, as long as it's live and they reevaluate in another few months.”
Bernadette Randles of Dromhall Hotel in Killarney, Co Kerry, said she doesn’t believe enough was done for employees in today’s budget.
She was hoping for an extension to the employment wage subsidy scheme (EWSS) today, and a restoration to the previous temporary wage subsidy scheme levels of €350/€410 per week.
The maximum amount available under EWSS has remained unchanged at €203 per week, but finance minister Paschal Donohoe has signalled today that there will be “no cliff edge” to the EWSS.
The scheme is due to expire in March 2021, but Mr Donohoe confirmed in the Dáil today that it will be replaced by a “similar scheme” for the remainder of 2021. The details of the replacement scheme will be decided on when economic conditions are clearer, he added.
While Ms Randles said she is grateful the scheme has been extended, she feels the current levels are not significant for staff who are used to their usual wage with tips on top.
“I feel they could have gone a step further for the staff,” she said.
“They tried, but it wasn’t enough.”
She welcomed the waiver of rates until the end of this year, but questioned whether this will need to be extended further.
“If we're not open, or operating, or there's no confidence, where will I get the money to pay them next year?”
On VAT, she is glad it has been brought down for when business picks up, but worried that guests might expect hotels to drop prices “even further” than what many are already doing.
“But look — it is a welcome fact,” she said. "It's one of the four main things businesses across the country have looked for; it will assist recovery."
Irish Hotels Federation president Elaina Fitzgerald Kane welcomed the extension of employment supports to the end of 2021, but echoed Ms Randel's disappointed that the rates of the EWSS have not been increased.
“This does not recognise the challenges facing tourism and hospitality businesses in retaining key staff during the difficult winter/spring months and against the backdrop of additional restrictions,” she said.
The Vat reduction has also been well received by the representative body, but it needs to be an ongoing measure “at a minimum of five years” it said.
Ms Fitzgerald Kane said she looks forward to seeing “the full details” of the Covid-19 Restriction Support Scheme.
She said the group will continue to seek an extension of the moratorium on bank term loans from six months to 12 months.
“Government must continue to support us on finding the way forward on this, as we feel it is a missed opportunity,” she said.
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