Hospitality sector ‘could collapse’ if wage supports are cut

Hospitality sector ‘could collapse’ if wage supports are cut

The hospitality industry “could collapse” if wage subsidies that support over 290,000 workers are cut, the Government has been warned.

he employment wage subsidy scheme (EWSS) rates are set to be cut from tomorrow despite ongoing concern about the Covid situation.

The subsidy is paid to 27,900 employers across all sectors at four rates worth €203, €250, €300 and €350 a week per employee, depending on their earnings.

From December, only two rates of €151.50 and €203 a week will be paid.

Chief executive of the Restaurants Association of Ireland Adrian Cummins said the future of the sector that includes restaurants, hotels and bars is at stake.

Mr Cummins said a €4bn contingency fund set aside in Budget 2022 in case Covid comes back should be used.

“There are massive cancellations across the hospitality industry,” he said. “I think now is not the time to be cutting supports for business at all.

“Nearly 100pc of hospitality depends on the wage scheme. Our focus now is to get businesses supported at the same level until March 31, and sit down in the first month of next year to see what the long-term strategy for our industry is in terms of living with Covid. The whole industry could collapse if we don’t keep the supports in place.

“The Government is telling people to cut social activity but we’re still open.”

He said if staff are laid off and go on social welfare, they could leave the industry.
The organisation has sent a letter to Minister for Public Expenditure Michael McGrath seeking an urgent meeting.

Chief Executive of the Irish Hotels Federation Tim Fenn said supports, including the EWSS, have been a lifeline to many tourism and hospitality businesses.

“We have been repeatedly told that there will be no ‘cliff edge’ yet that is exactly what hotels and guesthouses are now facing,” he said.

“As a direct result of government public health advice, the trading environment for the hotels sector is completely different to a few weeks ago.” He said the economic circumstances on which the decision to withdraw supports was based no longer exist.

He called for a firm commitment to continue EWSS supports at current levels, at least up until April next year and for the local authority rates waiver to be retained until June. The wage subsidy scheme is due to close to new employers from January 1. It is set to close completely on April 30.

A Revenue spokesperson said “any further changes or reconsideration of these changes is a matter for the Minister for Finance and the Oireachtas”.

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