Hospitality and tourism businesses to protest 'unsustainable' costs outside Leinster House
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Businesses across the tourism, hospitality and retail sectors will gather outside Leinster House on Tuesday to protest the "unsustainable" cost of doing business following an unsuccessful campaign to lower the industries' rate of Vat.
Organisers from the Restaurants Association of Ireland (RAI), the Vintners' Federation of Ireland (VFI) and other small business groups will highlight what they are calling "mounting cost pressures" on SMEs resulting from Government policies which have arrived "virtually all at once."
Business groups campaigned heavily for a reduction in the rate of Vat for the hospitality and tourism sectors in Budget 2025, calling for the restoration of the 9% rate introduced during the pandemic to support struggling businesses.
As part of the Budget, Public Expenditure Minister Pascal Donohoe introduced an Energy Subsidy Scheme worth €170m for hospitality and retail businesses struggling with rising energy costs, which he said would provide support to 39,000 firms. This equated to around €4,300 per business.
However, despite the added support, the Government’s decision not to reinstate the 9% VAT rate was deemed a “devastating blow” for the sector, with fears that the move could push over 1,000 more businesses to shut in the next twelve months.
According to a report by the Department of Enterprise, Trade and Employment, the hospitality and retail industries are the most vulnerable to labour cost changes and will be disproportionately impacted, with small hospitality businesses witnessing overall payroll cost increases of up to 36% by 2026.
Yet, organisers say that despite this report being published by the Government in March, no meaningful relief has been offered to SMEs since.
"The ‘Power Up’ grant of €4,000 that was introduced as part of Budget 2025 averages at €77 a week and will not make any significant dent in the cost increases facing businesses next year," the business groups said.
In addition, the RAI and VFI have urged the Taoiseach to meet with them urgently to collaborate on immediate measures to prevent widespread hospitality business closures over the winter and ensure long-term viability for the sector.
“Restaurateurs, small coffee shop owners and others in the hospitality industry are hardworking people operating in what is currently an incredibly challenging business environment," said Adrian Cummins, CEO of the RAI.
“They would much rather be serving great food and welcoming guests from across the country and across the world than travelling to Dublin to protest.
“Unfortunately, the lack of support for hospitality and small businesses in Budget 2025 made this demonstration inevitable.
Pat Crotty, CEO of the VFI added that publicans across Ireland "are at breaking point."
"Rising costs, combined with a lack of meaningful Government support, are pushing our businesses to the brink. We are here today to demand action because, without urgent intervention, many pubs won't survive the winter."
"The hospitality sector is the backbone of our communities, particularly in rural Ireland. Yet, despite repeated warnings, the Government has ignored the reality we face. The measures announced in the Budget simply do not go far enough to safeguard the future of our industry."
Speaking on Monday morning, Adrian Cummins, CEO of the RAI said that hospitality business would be protesting today because “nothing major was delivered” to the sector in the recent Budget.
Mr Cummins said that while the “demand is out there” the industry believes that there is now “no margin in business”.
“We can get price point level where you can increase your prices, and at a certain point, you start to lose your customers because."
He said the issue around the Vat rate increases was now "really biting into these businesses".
“These businesses now are finding that it is too costly to run a business, and there is no margin it, and the financial model is broken, so we need to get government to sit down with us and address this in a manner of fashion that makes these business into viable operations so that we can sustain jobs and sustain likelihoods.”
Mr Cummins told RTÉ Radio's that hospitality business were being hit by a combination of factors including the increased Vat rate, staff shortages, wage inflation, and input costs.
“I think the company needs to realise that the Vat rate at 13.5% is well above the average across Europe.
"And if they [the Government] sat down with us and looked at that as a viable option – and the Vat rate, we belived, should be at 9% - it would give these businesses that are in the food-related industry a viable future," he added.
"And what we're seeing now is the hollowing out of small SME's in villages, towns and cities across the country. It's not just in the hospitality sector, every other every other sector is finding it very, very difficult at the moment.”