Love is a battlefield. The hospitality industry makes that painfully clear with its, on average, tiny profit margins. On your average run-of-the-mill year, after paying staff and satisfying suppliers, profit margins rest at about 4%, maybe 8% on a bumper year. There’s at least a dozen Hallmark movies that romanticise opening a restaurant. An aspiring pastry chef buys a small cafe and does extremely well with the help of the hot love interest. Bullshit.
The reality of the Irish hospitality industry is a lot less romantic. Recovering from the financial impact of Covid and in desperate need of a break, Irish restaurants are now facing rising energy prices, changes in the city’s demographic due to a spiralling housing crisis, increases in the minimum wage and the cost of living crisis. To top it all off, the September 2023 budget meeting approved an increase in the VAT for the hospitality industry from 9% to a whopping 13.5%. Since this latest hit to the industry, almost 600 restaurants have closed in Ireland. The RAI (Restaurants Association of Ireland) have estimated about two restaurants a day have closed in the last 11 months. Each closure makes a €1.36 million dent in the economy, costing 22 direct jobs and a loss of about €105,000 in VAT. The latest victims are Michelin star winning celebrity chef Dylan McGrath’s two restaurants, Brasserie Sixty6 and Rustic Stone. The news came on Thursday, August 15, when McGrath announced their closing, assuring customers with reservations for Christmas that they would be taken care of at his Fade Street establishment, Fade Street Social, which plans to remain open. The message was clear: no one is safe, not even the celebrity chef with a Michelin star.
Why, with so much renown, are places like McGrath’s establishments forced to close their doors forever? The latest VAT increase is only the icing on the cake of a perfect storm. Many of these locally owned restaurants champion local suppliers to stock their ingredient lists. While this means support for a local community, it also means higher prices. Local ingredients make these establishments special, and no one would want them to change, but it does increase their output. Rising minimum wages also means each worker costs more to maintain. Each onboarding costs money which means casual workers are not necessarily feasible and, with the rising cost of living, who can afford to live close to work, especially in Dublin, on a restaurant staffer’s dime?
Riots in the streets are not the only recent attacks we have faced to our diversity
These closures are detrimental not just to the economy, but to our local community; and this impact extends beyond the more obvious harm of a lower demand for local products. Riots in the streets are not the only recent attacks we have faced to our diversity. As it turns out, it is being challenged in a lot more subtle ways as well. I am not talking exclusively foreign cuisine, this includes diversity with the classic restaurants that may not label themselves as Asian, Indian, or Middle Eastern. In an increasingly homogenising world where McDonald’s reaches every corner of the earth (I swear penguins in Antarctica probably have drive-thrus), local flavours and smaller businesses are more important than ever. Our tastes are a reflection of the options available to us. Don’t get me wrong, I love to hit up Supermac’s or Burger King after a night out, but what happens when that’s all that is offered? The big chains aren’t going anywhere. But what about those small cafes down little side streets that you stumble upon by accident, which contribute to the city’s unique vibe?
At some point our tastes will become so homogenised that we may forget the options we once had
With the trajectory the Irish hospitality is taking, that local flavour will be replaced with what? Costa? And if that’s all that is offered, that’s what we’ll start to prefer. People are creatures of habit. Familiar equals good. But with a lack of options, where is the individuality? At some point our tastes will become so homogenised that we may forget the options we once had. Maybe I am catastrophizing a little bit, but I have seen what the commercialisation of certain foods can do to the integrity of the product. Have you ever tried real Asian food? Xi’an sure isn’t it. Is Irish cuisine all potatoes? No. Diversity is important. Supporting these small businesses is important. They give the local community a voice. Between local products and local owners, restaurants highlight the dreams of local entrepreneurs and the integrity of their craft, an essential aspect to the character of Dublin.
But with a dire forecast for the industry, is there a way forward? It starts with decreasing the VAT. With the unprecedented number of restaurants that closed in the last 11 months, paired with the fact that many of the ones that remained open are praying for and relying on an increase in sales with the tourism of the summer months, Ireland’s hospitality industry needs help. Decreasing the VAT to 9% would give much needed relief to the restaurants already struggling to stay afloat. An increase in remote work has decreased corporate outings and the average footfall in Dublin’s city centre. Incentivising movement through and within the city centre is another way to bump up the sales of local businesses. The increase of the price of living means that groceries are expensive, not to mention a €4.10 cappuccino from Bestseller. Tackling the housing crisis would make a big difference to these small businesses. Less money for rent means more for dining out and more workers available for small businesses. Fixing the housing crisis may be a bit of a haul, but decreasing the VAT is a smaller ask. Especially considering the economy is taking a bigger hit with the sheer number of restaurant closures than it would if the VAT was decreased back down to 9%. The bottom line is our local restaurants need support that even popularity cannot fix. They are a speakerphone for local products, diverse tastes and everyday workers. They serve so much more than the dish you ordered.
