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Kicked again: The never-ending woes of the Irish hospitality sector

Throughout the Covid-19 pandemic and associated restrictions, few industries suffered quite as much as the hotel and hospitality sectors.

I mean, these lads got truly rinsed. It was an absolute massacre, and not long ago either.

Before being allowed to reopen in January of this year, hospitality businesses had been closed for most of the preceding 22 months – a shocking length of time to be out of work, which almost no business or industry could reasonably be expected to sustain, even with government supports.

And of course, many did not sustain it. Hundreds of restaurants, pubs and the like closed shop permanently the length and breadth of the country, as a direct result of Covid-19 restrictions.

And now, with the war in Ukraine, as we try to win gold in the “Most Charitable Nation In The World” Olympics, we should stop and consider what sociologists like to call the “law of unintended consequences.”

For example, when the government decided that they would attempt to fill as many hotels as possible with new Ukrainian arrivals, what they probably didn’t bargain for was the devastation of the Irish hospitality and tourism industries. But that may be exactly what we get.

Hospitality, if you remember, was the first domestic industry to have Covid passes applied to them, and had their numbers capped for social distancing purposes. So even when they were open, it wasn’t like they could resume their business as usual; they were hit with hurdle after hurdle which further drove them to the edge financially.

And this summer – the first summer since reopening, with tourists set to flood in from abroad – seemed like an absolute Godsend for the beleaguered sector.

And yet, we look at the news, only to find that hotels are being financially hammered by their contracts to accept refugees.

As reported by the Irish Times:

“A Wexford hotelier has said that providing accommodation for refugees will become “unsustainable” as summer season hits unless more support comes from the Government.
The Danby Hotel is currently hosting over 40 Ukrainian people across 27 rooms, catering to refugees who have arrived into Rosslare Europort nearby.
But manager Ocean Song said bar and restaurant sales are down 40 percent over the past fortnight, which he said won’t be possible to maintain past its current contract with the Department of Children into July.
“We’re happy to provide the space here but we have a decision to make once we hit June. We’re trying to do our best to support them. We’ve refused a lot of bookings and this is stopping our business when we’re usually flat out.”
The hotel is paid the winter rate for a guest by the department for each person it hosts, roughly €25-€35 less than the summer rate.
“Lots of Irish people and English people would pass by here normally and stay with us and that’s not happening now. It will be very difficult [if the rate isn’t increased].”

The hotel’s owner went on to mention energy costs as a concern, with the ongoing energy and cost of living crisis thinning the profit margins of hospitality businesses around Ireland.

Previously, head of Fáilte Ireland Paul Kelly warned that Ukrainian refugees being kept in hotels “is neither good for refugees nor good for tourism.”

Pointing out that thousands of hotel rooms were being used by Ukrainian refugees currently, Kelly said:

“For every euro that a visitor spends on accommodation, they spent two-and-a-half euros in other parts of the economy. If you have significant tourism accommodation stock coming out of the market across the summer… it will make it very difficult for pubs, restaurants, activity providers and visitor attractions that rely on that visitor. If they can’t get a bed, they won’t come.”

So not only do the hotels lose out, but so do all of the other businesses which rely on tourism money to make ends meet. How are these industries supposed to survive yet another summer of disruption?

All of this is compounded by the fact that 25,000 Ukrainian refugees have arrived in Ireland to date, with more arriving every week. A cabinet briefing says that 33,000 could be here by the end of May.

And the government is repeatedly doubling down on the claim that they will put “no cap” on the numbers entering the country (against the wishes of the majority of people, according to a recent poll).

They’re even preparing to accept refugees for as long as three years.

There is obviously no conceivable way in hell that Ukrainian refugees are going to stay in hotels for three years. That would be tantamount to nationalising the hotel industry.

No doubt hotel owners, quite reasonably, want to go back to doing what they started their business for: running a hotel. They didn’t set out with the intention of running a mandatory hotel quarantine slash emergency asylum centre.

None of this, of course, is a critique of the refugees themselves: they have no hand or part in the mismanagement of this crisis. It’s simply to point out the negative impact of the policies as they’re being implemented.

Looking at the big picture, over 50% of households that had initially pledged to take Ukrainian refugees have failed to follow through when push came to shove.

Of the remaining individuals who did follow through, how many would be willing to keep a stranger or group of strangers in their household for years to come? Probably not many, realistically. Sure, you might let some strangers stay with you for a few months, but three years is a major ask that most simply couldn’t hack.

What this means is, many of the refugees currently taken care of in accommodation will likely need to be re-housed by the government in the not-too-distant future. And how is that going to work? How is the government, in a country with a decade-long housing crisis, going to pull 20,000, or 30,000, or 40,000 living spaces out of their backsides in a few months? It’s preposterous on its face.

Not only does this have the potential to put the nail in the coffin of many businesses in the Irish hotel and hospitality sectors, but it will no doubt cause unforeseen levels of chaos in many other areas of the economy and society that nobody has yet imagined.

Barring some miracle or a swift end to the war, this refugee policy is shaping up to be a catastrophe of epic proportions.

 

 

 

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