By Gráinne Ní Aodha, PA
Almost three-quarters of publicans outside Dublin say turnover is now similar or greater than before the Covid-19 pandemic, with many expected to upgrade their pubs in the coming year.
A new survey shows the vast majority are confident about the future of their bars, despite the spiralling cost of energy, insurance and other operating expenses.
The research for the Vintners’ Federation of Ireland (VFI) reveals that 72 per cent of publicans say turnover is now at a similar level to – or has exceeded – pre-pandemic turnover, with the same percentage turning a profit in 2022.
The group’s new president John Clendennen is expected to tell its 50th AGM on Tuesday that post-Covid, pubs are striving to become established visitor destinations and vital economic pillars in local areas.
But he is also to warn that pubs face a “huge battle” to stay afloat and will need key State supports – including the special 9 per cent VAT rate for hospitality to be retained and insurance reform.
“In 2020, it felt as if our world was coming to an end. Through an abundance of resilience, innovation and diversity in product offering, we came through the crisis,” Mr Clendennen said.
“Pubs are no longer simply competing with the bar down the road, but with everything from gym membership to television subscriptions, live events and foreign holidays as people choose where to spend their hard-earned disposable income.
“Across the country, pubs have been inventive, many becoming visitor destinations for tourists from at home and abroad, attracting and keeping money and jobs in the country.
“The Irish pub is a cultural institution, but publicans face a huge battle to keep their businesses viable over the coming years.
“Key supports such as keeping VAT at 9%, and energy interventions, are crucial to the pub trade and the wider hospitality sector.”
The VAT rate for the hospitality sector was reduced from 13.5 per cent to 9 per cent in November 2020 until December 2021 as part of Budget 2021, in response to pandemic restrictions, at an estimated cost of €401 million.
It was then extended to August 31st, 2022 at a further cost of €251 million, and then again to March 1st, 2023, at a cost of €250 million.
The latest extension, expected to last until August 31st, is to cost €300 million.
The VFI survey of 514 members, conducted late last month by business consultants BDO, found that 96 per cent of them operate standalone pubs while 4 per cent are part of a chain.
Nearly a third (30.8 per cent) describe their businesses as gastropubs and the remainder as traditional bars.
The survey indicates that more than a third of publicans plan to upgrade their premises this year.
Mr Clendennen said there is clear evidence of a leap of faith among publicans, many of whom have experienced soaring input costs that have placed their bars under huge strain.
He said: “There has been considerable commentary regarding pub closures in recent years and hopefully this research will act as a catalyst for new entrants to the trade.
“Insurance remains an ongoing headache for our members so it is vital reforms in this area are implemented by Government.”
The Government is currently progressing its Action Plan for Insurance Reform and published its third action plan on the matter in November.
The VFI will hold its 50th anniversary AGM at the Knightsbrook Hotel in Trim, Co Meath, on Tuesday.