HOTELIERS in Dublin who ‘gouge’ customers attending major sporting events and concerts are being blamed for rural businesses buckling under vat and minimum wage hikes.
The owner of Salvi’s café in Kinsale, Cllr Marie O’Sullivan (FG) said the doubling of the vat rate has penalised those least able to afford the unending cost increases.
Speaking at a meeting of the Western Division Committee meeting of Cork County Council this week, she referred to the spate of closures in Cork city – all popular restaurants who simply cannot meet the cost of doing business.
‘As far as tourism goes, West Cork is one of the busiest areas in the country, yet hospitality is on its knees,’ said a clearly emotional Cllr O’Sullivan.
‘Just because they look busy doesn’t mean they are making money, because the cost increases are crippling,’ she added.
The councillor said it is an open secret that the profit margins in the industry are so tight, that many are going to the wall.
‘The costs in my own business have increased hugely,’ said the councillor, who explained that what should be a daily special, priced at €12, actually needs to sell at €18 to make a small profit.
‘We have all been trying to keep our businesses open,’ she added. ‘It is the small, indigenous businesses that are the heart of every town – they are what keeps the local economy ticking over.’
Cllr Sean O’Donovan (FF) who runs The Drake in Crosshaven said he, too, is ‘hurting’ having to deal with cost increases such as electricity, insurance, wines and spirits, and staff costs in general.
‘We pay above the minimum wage, but any increase has a knock-on effect on staffing across the board,’ he said.
Cllr Deirdre Kelly (FF) said she could understand Cllr O’Sullivan’s emotional plea for the support necessary to keep businesses open.
Having worked in HR in the hotel business, Cllr Kelly said it is next to impossible for businesses to pay the vat increase, as well as absorb the minimum wage increase on top of everything else.
‘That’s a statutory requirement imposed on the sector and compounds the hardship for all in the industry,’ she said.
Cllr Danny Collins (Ind) of The Boston Bar in Bantry said the pressure on small businesses has become immense.
‘You will see more doors closing,’ he warned. Cllr John O’Sullivan (FG) claimed rural towns and villages ‘are going to be decimated’.
These hikes have implications across the board, he said. ‘The minimum wage went up and the Vat went up, but the spending power of the public has not kept pace with that.
‘Householders also have higher energy costs so we will need a review of policy, or a stimulus package, if we are to support rural Ireland’s hospitality sector,’ he added.
‘Given the plethora of closures in Cork city and the fact that we are only into the third week of January, we need to write to the minister, and raise this at a full meeting of the Council next Monday,’ said Cllr O’Sullivan.
Cllr Caroline Cronin (FG) who also runs a small food business said: ‘I know the hard work that Cllr O’Sullivan puts into her own business and the pressures she is facing.’
As a business development manager for a coffee company, Cllr Paul Hayes (Ind) said he has ‘an inside track’ and is aware of the pressures on small business owners.
‘Every week, you are seeing cafés and bars and restaurants closing down,’ said Cllr Hayes, who pointed the finger of blame at price-gouging hoteliers in the nation’s capital.
‘They were hiking the prices but it is small restaurants in rural areas that are bearing the brunt,’ he said. ‘Our government has some control over this, but they are not tackling energy or insurance costs. They need to take a look at that,’ he said.
The newly co-opted Social Democrat member, Cllr Chris Heinhold, who runs the West Café wine bar in Bantry, which employs 20 people, said he, too, is facing downward pressures.
‘Since 2020, our sector has been hit again and again, and I think many of us just feel there is nothing left in the tank. We can’t absorb another rise, no matter how much we may want to,’ he added.
The restaurateur confirmed that he opened a second business, Al’s Diner, on Bridewell Lane in October, but closed it before Christmas.
‘We are hoping the closure is just a temporary closure, and that it will reopen in spring, but, in the meantime, we are still paying the fixed costs – such as rates, rent and energy – at full whack.’
Cllr Joe Carroll (FF) said government and Revenue have ‘forgotten about the small business people’.
Meanwhile, Independent TD Michael Collins has called for ‘an emergency mini budget’ to halt what he called the haemorrhaging of small business closures.
Fianna Fáil TD Christopher O’Sullivan said additional pressures – like pension auto- enrolment – is also adding to the pressure on businesses, but, for now, he said, the priority would be to return to a 9% vat for food in the hospitality sector.
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