Hospitality Fears End of Supports

​Bars, hotels and restaurants fear they risk going out of business if Government fails to retain some Covid supports this year.

According to a survey by insolvency experts Kroll and the Restaurants Association of Ireland (RAI), more than 85pc of hospitality firms say they would not have survived without government supports.

Out of 150 companies surveyed, 42pc said they will not have enough working capital after the end of supports, such as the employment wage subsidy scheme, which will stop this month.

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"My own personal view is that we are likely to see an increase in insolvencies as we go through the year, particularly in the back end of the year," said Declan Taite, managing director in Kroll’s restructuring team.

The RAI is calling for a retention of the 9pc Vat rate for hospitality, which is due to rise to its pre-pandemic level of 13.5pc in September. Almost 105,000 businesses were availing of the tax warehousing scheme as of the end of January, with more than €3bn in tax debts "parked" until next year. Interest will start accruing on those debts from January 2023.

"There’s no question that staffing is now the biggest issue for our sector, with the vast majority of restaurant and hospitality businesses having to increase wages to retain staff," said RAI Chief Executive Adrian Cummins.

Ref: hospitalityenews.ie