Five years after the global pandemic reached Ireland, TheCity looks back at how the Irish food and hospitality industry has evolved.
On the 28th of February 2020, Ireland officially saw its first Covid-19 case, ringing in an era that would reshape Irish society. Although different sectors have undergone drastic changes during and after the global pandemic, social distancing measures completely overturned everyday operations in the food and hospitality sector.
“Restaurants and hotels and bars, coffee shops – businesses across the whole sector had taken such a heavy hit because they were either closed down or had to change their business model entirely,” said Margaret Connolly of the School of Culinary Arts and Food Technology in TU Dublin.
In 2021, the Central Statistics Office found that 9% of food and accommodation enterprises had shut down since the beginning of the pandemic. Others adapted, like Bowls Healthy Eating in Dublin. Founder Andy Irving said: “At first, we were doing takeaway, and when we fully reopened, we changed our opening hours and our menu. We do specials now, and in order to prepare them, we decided to open later.”
At first glance, food and hospitality seems to have mostly recovered. After the restrictions were scaled back, some even noticed an uptick in customers.
At the Raheny Inn, for instance, barman Ben Cameron noticed that all the regular customers came back after the lockdown. “I have more people now than before, because they just want to go for a drink after Covid. So, it’s been a lot busier,” he said.
Dr Ralf Burbach, head of Hospitality Management at TU Dublin, also saw a “huge built-up demand” for travelling after restrictions were lifted.
“The [hospitality] industry is now back to pre-COVID levels in most respects, for instance in terms of occupancy rates.
“However, Covid did have a huge impact, particularly in terms of labor. Almost 40% of people that were working in the hospitality industry left or were furloughed and subsequently didn’t return.”
The shortage of skilled staff in food and hospitality has been a major issue in the industry. It’s a particular issue for rural restaurants, many of which struggle to find people who are willing to work in more remote locations. Consequently, many were forced to shorten their opening hours.
Although the overall revenue in hospitality has increased over the last years, profits aren’t necessarily higher because many businesses have higher expenses nowadays. Inflation and the rising food, electricity, and housing prices have made it harder for establishments to stay afloat.
“Our industry is always the first to be hit when there’s a cost-of-living crisis, when inflation rates go up, because it’s discretionary spending, it’s luxury spending. If there is not that much left in your budget at the end of the week, the first thing that’s going to be cut is going out for dinner or getting takeaway,” said Connolly.
Additionally, health concerns have changed the eating habits of many consumers. According to Connolly, especially elderly people seem to be going out far less since the pandemic.
“Even when we came out of Covid, there were so many legacy issues,” she said.
The changes in the Value Added Tax (VAT) – a tax paid for most imported goods and services within the EU – became another one of these issues. During the height of the pandemic, the VAT for food and hospitality was reduced from 13.5% to 9%, giving the industry a chance to recover. According to the Restaurants Association of Ireland, the return to a 13.5% VAT in 2023 proved “the final nail in the coffin” for many of the over 600 restaurants, bars, and cafes that have closed since then. Fine Gael has since committed to returning the 9% VAT rate for food and hospitality in the next budget.
“There’s been almost a perfect storm of negative things that have impacted the industry. It’s been relentless for hotels, restaurants, bars, coffee shops for the past five years,” said Connolly.
Lockdowns and other challenges have forced food and hospitality to rethink many of their practices and find solutions a lot quicker than they usually might. Especially in terms of technological advancements, “Covid has really catapulted us a couple centuries ahead,” according to Dr Burbach.
“One of the legacies of Covid is the idea of a cashless society, I can’t recall the last time I had cash with me.
“It’s made businesses a lot more innovative. QR codes on tables instead of menus, things like that, they’re very common now and they’re here to stay,” he said.
The pandemic has also birthed many entrepreneurial food companies that focus on at-home consumption like meal kits and veg. boxes. Initially used as a social distancing measure, outside seating areas have become much more prevalent in Irish restaurants.
Despite the challenges of recent years, Dr Burbach remained optimistic for the future of Irish hospitality.
“The numbers are looking very good. The employment levels are back to what they were in the industry with over 250,000 people involved in the broader tourism, hospitality, and accommodation sector. And that’s set to increase worldwide – one in three newly created jobs will be in the tourism/hospitality industry by 2030. That’s absolutely huge,” he said.
Overall, he thought that “the hospitality industry changed for the better” since the pandemic.