In the midst of the pandemic, we invited commentary from our readers engaged in the hospitality sector, who are grappling with the tribulations of running small enterprises in recent times. The array of difficulties they faced was extensive, encompassing increased VAT, long-term repercussions of forced closures due to Covid-19, and escalating employee-related expenditures. These challenges have led to countless sleepless nights for many, as they navigate uncertainties in their industry.
Áine McDonough of McDonough’s Coffee House & Bar, based in Bettystown, Co Meath, narrates her own ordeal. The public house, in operation since around 1896, has been managed by four generations of her family. Before the pandemic hit, her father used to run the pub which was open seven days a week. But Covid-19 related closures and subsequent upkeep expenses of the premises left little choice but to initiate a takeaway coffee venture to meet financial obligations. With the easing of restrictions, they now cater to their customers as a coffee shop during the day while reverting back to a pub at night.
Her patrons’ routines have seen a shift and they now run their establishment six days a week, opening the pub only from Thursday to Sunday for restricted hours, cutting down on workforce and energy consumption. The pub-goers now tend to start and end their evening earlier than before, a change she attributes to both the pandemic and rising costs of taxi fares and alcoholic beverages. The business is currently operating with an equal focus on coffee and alcoholic drinks.
The past four years have been strenuous for Áine as juggling multiple responsibilities mean that personal time off has become a rarity. Although their coffee shop now employs more staff than they did prior to Covid-19, the obstacles they face have multiplied. Due to Brexit, their insurance premium for the thatched building has skyrocketed, coupled with already high utility costs. The leftover income just about covers the additional expenditures of sick pay, pension funds and enhanced employer PRSI, putting a strain on their profits.
Áine does make it clear that she genuinely wants to take care of her employees, but in doing so, her own wellbeing, both mentally and physically, is compromised. She’s torn between preserving their historic building and servicing her local community while trying to juggle her staff’s needs. In her opinion, while everyone else seems to be taken care of, she’s left with double the workload for half the salary. Moreover, she feels that this year’s budget has further disadvantaged her and her family, whilst seemingly sounding the death knell for small family-owned businesses and other SMEs.
If my son opts to succeed me, he’ll be the fifth generation in control. However, he has witnessed the substantial time commitment the business demands and shared his desire to choose a different path for himself.
‘It’s the first time in 58 years we haven’t made a profit,’ confesses Felim Meade of Graham O’Sullivan Restaurants in Dublin. Our 58-year-old family-run eatery is enduring a financial struggle I fear will put an end to its 60-year legacy. For the first time, we are failing to generate a profit this year, thanks to the immense financial pressures imposed by government policies in the recent year. Augmenting the business to offset this newfound burden is proving impossible. Since September 2024, ends simply aren’t meeting.
We, businesses, are not after slow, inadequate grants or any grants for that matter. We hold a preference for a landscape void of governmental hindrances where we can strategise, develop and expand freely. The situation spiralled out of control following sudden food inflation, worsened by the government piling more financial burdens on us. Increment in VAT, additional wage and related labour costs, and the extra costs from the 2025 Budget have altogether eliminated profits, consuming even the retained profits. It’s quite terrifying how we’re struggling to survive and how oblivious the government seems. Trading our way out of this mess which initially had us reeling is now a far-fetched dream.
One would hope an official in the Finance Department might ponder on the rising number of closures and realise the oversight in their decision-making.
‘You go forth each day, fuelled by the belief that one day it will all pay off,’ shares Chloé Bolger from The Purple Door Café in Leenane, County Galway.
Ever since the announcement of the budget, I’ve been in a state of despair and it’s a struggle to free myself from this desolation. I kick-started the operation of my small cafe amidst the Covid crisis, which at that time was fraught with multiple complications. The rollercoaster ride included periods of normal business resumption, subsequent shutdown, transition to takeaway only, followed by indoor dining with several restrictions, a return to normalcy, Brexit, and an onset of inflation. It’s all about learning and adapting, adjusting and persevering, and maintaining the spirit of hope that eventually everything will be worth the efforts. The sacrifices on the family front, nights with no sleep, contemplating your actions and strategies, waking up after few hours of sleep and dreading what the day has in store for you, be it a shortage of staff, a tardy delivery or equipment letting down your team. Some days can be punishing, but the belief that it will all pay off one day keeps you going.
However, there are days like today where I question whether this day will ever come. Despite being in my 40s, I can’t afford a pension, how am I expected to start providing one for my employees? Don’t get me wrong, I’m all for it but the only option at my disposal is to hike up our prices which I’m not comfortable doing.
Yet, the belief holds and compels me to open the doors of my quaint cafe tomorrow, with a hope that one day it will all be worth it.
‘We are attempting to persist for another year to see if the situation ameliorates or alters’
Kenneth Murphy, The Garden Kitchen Café, Co Waterford
Four years back, we launched a cafe aligned with a garden centre. A couple of years later, we got the chance to inaugurate a second cafe in Ardmore, Co Waterford. Just as our establishments have expanded, so have our costs. We don’t draw wages (My spouse and I own the cafes and we both are chefs). We have decided to give it a year to see if circumstances take a turn for the better or not before deciding to shut shop. We typically employ 15-20 staff, usually locals, and try to source as much as possible locally. Our Ardmore cafe is an integral part of the local community and stands out as the only place operating all week in the village.
‘I am resolved not to relinquish it without a struggle’.
Monaghan, the owner of Smithfield’s One Society and Hidden, shared their story. They managed to keep their business afloat despite the 2023 riots, and persevered through the April to August summer season. However, a worrying drop in profit was evident by September, which echoed January’s figures. July also saw a 15% decrease compared to the previous year. Fearful for One Society’s future, they considered shutting down or taking a further gamble.
Faced with these challenges, they opted to expand their business by opening Hidden, a venture similar to One Society. Their rationale behind this move was to encourage growth and secure their dreams and business prospects. Despite the challenges faced by One Society, they are determined to keep fighting for its survival.
Despite the flourishing economy and thriving job market, their industry risks collapsing without government intervention. The danger of their entire operation going bust is real if Hidden does not succeed promptly. They appealed to the government to step in, emphasising the inability to sustain more costs or pass them onto consumers.
Meanwhile, Donal Cawley runs the Merry Ploughboy Pub in Rathfarnham, Dublin. The venture is co-managed by a troupe of traditional Irish musicians who utilise their accountancy and financial expertise to run the business. After 25 years in the hospitality sector, their main product, a traditional Irish meal and show, accounts for 50% of their revenue and is popular among tourists. Recently, they managed to match their 2019 visitor numbers. Still, they admit concerns over whether they are only operating to pay their staff and maintain their team, hopeful of an upturn in the future.
Affordable accommodation shortage in Dublin is a key obstacle to our growth, as it impacts our chief demographic – the budget-minded group tourists. Additionally, we’re grappling with surging wage demands, all-round price hikes, and the impending VAT increase in August 2023. Our location outside the city centre compelled us to operate our own night shuttle bus service commencing 2015 due to expensive taxis and inadequate public transportation. Granted, previous financial decisions regarding our business structure have proven beneficial, but if we were to establish a fresh operation today, I’d hold a grim outlook for any new endeavour in the hospitality or tourism sector.