Restaurant Sector: The Next Steps And How Best To Maximise The Down-Time
Adrian Cummins – Chief Executive Officer of the RAI (Restaurant Association of Ireland) is strong on calls for financial support mechanisms and dismissive of what he says as uncoordinated initiatives when it comes to training during this extended period of down-time.
The first step, he says, is for the Government to help businesses in the sector to clear their debts, followed by a “re-engineering” of the industry: “They (the Government) need to support us in a targeted way… through supporting restaurants and all hospitality businesses around legacy debt.
“If businesses have built up debt with suppliers and landlords, for example, as well as areas around fixed costs, there should be some kind of compensation scheme for all small businesses but particularly in the hospitality sector because we are the worst affected.
“We need to re-engineer our industry and, when I say ‘re-engineer’, I mean the provision of grant aid to help businesses; to help them re-design their interiors if they need to accommodate new requirements such as social distancing… We also need support around fixed-cost elements going forward. This means VAT being reduced to zero and commercial rates being written off. We also need low-interest loans that can be paid back over the next ten years.
“If the Government is able to provide low-interest loans to us at ECB rates, we can restructure all of our current debt to long-term debt. So if you’re paying back 5% to your bank over a few years, you can restructure that to 0.5% over ten years.
“I think that that is where the conversation needs to move towards fairly urgently because what you have at the moment is cash-burn in our sector where people are ploughing through their cash reserves paying running costs such as rent and insurance.”
In terms of training, Adrian has firm ideas on where that conversation should be heading as well. Recent training initiatives such as the ‘Your Future, Your Skills’ (a joint initiative from Educational and Training Boards in Kilkenny, Dublin, Wicklow and Kildare, as well as City & Guilds, SOLAS and the Government) have been embraced by the Irish Hotels Federation and other organisations and individuals but the RAI’s stance is resolutely unenthusiastic:
“We’ve so many disparate organisations out there that are all doing their own thing… we need structure and we need national structure around this. There’s an absolute lack of co-ordination on this across the country. I’ve no problem in calling that out… We have the likes of engineers and bricklayers deciding how best to organise training in the hospitality sector in this country.
“There are about 120,000 people that have lost their jobs in the restauration sector… Being practical about this, I don’t think that we’re going to bring back the entire work force.
“Obviously, social distancing will have a direct impact on colleges and catering colleges and hospitality schools across the country. Adult education has ceased. We can move it online and ask ourselves how we can re-skill or upskill an entire work force over the coming years and that they will actually get compensated (by the State) for doing it. I think that’s where the conversation should move towards on this issue.
“I think that now is the time we should be merging all of our training organisations into one super-organisation for hospitality training. I think that is what needs to be done and I’m very much of the opinion that now is the time to do that because we are the worst hit and I don’t think that the Educational Training Boards have the skill set to do it.
“We also need to look straight away at the issue around apprenticeships more clearly. If we can nationalise private hospitals in a day, I don’t see why we can’t do something similar for the hospitality sector.”
As regards when restaurants will even open again remains to be seen. There is a plan in place to have them open on the 29th of June, of course, but that’s a plan that’s prone to change depending on the progress of the ongoing struggle to contain Covid-19. We could even see a situation where pubs will be open before restaurants. As the loss of the VAT battle last year illustrated, the vintners’ associations have traditionally enjoyed significant influence over Government decision-making.
“I’d like every business to be able to re-open,” says Adrian rather generously. “It’s not about who opens first or who opens second or who opens last. The conversation needs to be around giving confidence to consumers, confidence to our staff that it’s a safe environment to work in. So if the Department of Health decide that everyone can open, so be it. We need to take direction from the experts in this regard – I’ve yet to find a hospitality expert who’s also an immunology expert … I don’t think that our consumers would take too kindly to us trying to push the boundaries beyond the safety standards as set by the medics.”