Covid-19: Westport braces for tough times ahead

Noel Kavanagh will have invested just shy of €6 million between his two businesses on Westport's Octagon by the end of this year. "The timing couldn't have been worse," the chairman of the Kavanagh Group, said.

Sitting in his now shuttered O'Cee's coffee shop overlooking the Octagon – the town's focal point – Noel snr details the recent spending – €3.8 million adding 28 bedrooms to the Wyatt Hotel just across the street, increasing it to a 90 bedroom hotel, and a €1.9 million overhaul of his SuperValu outlet in the town which fronts on to Shop Street.

"Fortunately, it's an established business, part of an established company, so we can carry it," he says of the Kavanagh Group, which controls 10 SuperValu outlets, the Wyatt Hotel in Westport and four grocery stores in the UK.

But Kavanagh cautioned that other businesses in the town, which has a population in excess of 6,000 and a reputation as a tourist mecca, will face serious difficulties as a result of the closure of almost all of its hotels – a move which effectively turned off the tourism tap overnight.

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Westport is home to large multinationals, including botox maker Allergan and locally-owned outdoor wear giant Portwest, but it is, like much of Co Mayo, heavily reliant on tourism.

Last year, 324,000 overseas tourists travelled to the county, spending a total of €78 million in the local economy. While some of those travelled to places such as Cong, where Ashford Castle is situated, and elsewhere in the county, Westport is the traditional hub, notes Eva Costello, a team manager for Fáilte Ireland's Wild Atlantic Way group.

Some 38 per cent of the tourists who travelled to the west of Ireland last year came from the US and North America, while 12 per cent came from England, Wales and Scotland.

On top of the foreign visitors, there were more than half a million trips from domestic travellers in 2019. They spent even more – about €120 million – in the county.

And, going by Fáilte Ireland’s estimate that every €1 million in tourism revenue supports 27 jobs, it quickly becomes clear that towns such as Westport will be troubled by the current crisis.

Peter Hynes, the chief executive of Mayo County Council, estimates that as many as 1,000 jobs in Westport are in the tourism and hospitality sector. With the Government's far reaching shutdown of all non-essential businesses, those jobs have already been lost, even if only temporarily. In Kavanagh's Wyatt Hotel alone, 93 people lost their jobs when he was forced to shut the doors.

“The hospitality sector certainly, this side of July, it’s very difficult to see coming back,” he says.

Westport is not unique but what is happening in this picturesque town is worth examining, given that the mix of the local economy is spread rather evenly between tourism and the activities of multinationals.

Even with that mix of business, Westport Chamber of Commerce chief executive Geraldine Horkan warns the effects of coronavirus will leave a scar. "It's bound to," she says. "Nobody goes through a war without a scar and this is economic war."

Her hope, such as it is, rests in its people. “There’s huge resilience in the people here,” she says.

Even if that is the case, the local authority will be faced with a challenge in maintaining services this year as many businesses find themselves unable to pay rates.

“Our rates income is budgeted this year at €36 million and we reckon that 50 to 60 per cent of that could be at risk because of the mix of businesses we have,” says council boss Hynes. “Rates are definitely going to come under pressure. The one thing we’ve been saying to people locally is that, if you find yourself in difficulty, come talk to us.”

Shutdown

Walking down Bridge Street – the town’s main street filled with pubs, shops and restaurants – one can see how the county council will get plenty of calls seeking rate holidays. With some exceptions for essential services, most outlets are closed.

And the speed at which businesses evacuated was clear from the window of one relatively new pub on the street – Janey Mac’s - which featured three signs. The first was advertising for bar and floor staff, the second told of the need for social distancing for patrons in the pub while the third read: “Closed until further notice”.

Another new business owner operating on Bridge Street is Graham Byrne. He opened the door of his Krem Gelateria & Cafe in July last year. In the seven months since, he says, he had built a solid trade. Projections for this year suggested that he would be able to increase his staff headcount and get through the leaner winter months with a bit more ease than he did in his first calendar year in business. Not any longer.

“The biggest worry [now] is getting through next winter after all of this. Because my turnover in winter is very, very low. . . Next winter I’m looking at seven days a week and not really having any staff,” said Byrne, whose business primarily sells fresh ice cream and gelato – an enterprise with a clear summer bias for sales.

But being established won't protect business from the fallout either. Seamus Duffy, who owns the Bookshop on Bridge Street, stayed open initially but, when he saw how the virus was spreading in Italy, he decided to close in the interest of public health.

“I’ve been in business since 1993 – 27 years – and this St Patrick’s Day was the first St Patrick’s Day the shop wasn’t open,” he said. The fact that he’s not starting up in business is a help, he says, adding that for those who are, “it’s a very tough introduction”.

A naturally positive person, Duffy says he’s concerned but optimistic. “Westport is lucky in the sense we have a big hotel group and they work together to promote the area”, something which could help the town bounce back when the recovery begins.

Even as the Government rolls out several measures to help those who have lost their jobs and the employers who still have staff, there was evidence in advance of Mother’s Day that consumer spending was taking a hit.

Noel Kavanagh jnr, the managing director of the Kavanagh Group, notes that it had significantly reduced its supply of fresh cream cakes, something that’s viewed as “more of a luxury product”.

“People will control their spend slightly and there is a big move into staple grocery and home-baking products. We are also seeing a lot of fresh produce like meat being bought because people are at home cooking meals more than normal,” he says.

And what these measures will ultimately mean, if businesses do get up and running again by the summer, is that fewer casual workers, such as students, will be employed.

Some will opt for a more permanent solution. According to Fáilte Ireland’s Costello, those who struggled through the last recession and are now faced with a crunch as a result of the coronavirus, will have to make hard choices.

“I think people in tourism businesses will start to make choices here. Some people have come out of the last recession and rebuilt and may not want to do that again.”

Asked to take a guess on when tourism businesses might reopen, Costello suggests that a lot of businesses she is talking to are suggesting June. But the problem facing all of these businesses is the likely drought of US tourists throughout the remainder of this year. For Westport, where almost two in five foreign tourists are from the US, this is clearly a significant issue.

“The US business in particular, hotels are talking about rates for 2021, they’re not even looking at it for this year.”

The reliance in US tourists demonstrates how economic contagion is as much an issue for Westport as anywhere else. Global biopharmaceutical company Allergan, which employs about a quarter of the local population, recently completed a €160 million investment in its Westport facility. Any slowdown in the global economy would undoubtedly hit every sector in society which, in turn, could prompt job losses.

Allergan’s headcount is not impacted by the current crisis, it says, given that there is a reliance for its products in the global market. It has introduced social distancing measures to ensure its manufacturing capabilities are not affected and 300 of its staff are now working from home.

Nevertheless, people will hope that this crisis ends sooner rather than later because there’s little doubt that, if there’s mass unemployment in the town’s multinationals, it won’t be long before the small- and medium-sized businesses are forced to close their doors for good.

Financial crash

And in Westport, like elsewhere, the memory of the 2008 financial crash hasn’t faded.

Hynes, now chief executive of Mayo County Council, was at that time the Westport town manager. “This time it’s different – there’s an unseen enemy,” he says.

But there are similarities as well. “There’s a community spirit seen in the depths of the recession that has re-emerged.”

Nevertheless for businesses that have remained open, such as the Kavanagh Group’s SuperValu, priorities have had to shift. “The priority is the protection and safety of our own staff and customers. We have a wide demographic but customers are responding very well to the requirements for social distancing,” said Noel snr.

Of course, economic measures have social consequences, as Noel snr explains. The decision to close his coffee shop – O’Cee’s – was taken with a “heavy heart”. “I would have a substantial number of elderly people who would go to 10 o’clock mass and come up here and congregate. You have a lot of people who have lunch here every day.”

Even before they were cocooned, those numbers had fallen off sharply as people became more cautious about going out and mingling. But “this too shall pass”, he says. “The domestic market, having been cooped up, will want to reward themselves and I think there’ll be a bounce. It’ll take time but I think it will come back.”

Peter Hynes agrees. “The second half of the year we’ll be looking to make up a lot of the lost ground because, hopefully, the people who’ve been isolated will feel the need to revive their spirits.”

“There will be casualties,” says Geraldine Horkan, “but people will come back . . . there’s a good few aul’ warriors around as well.”

Fáilte Ireland’s Eva Costello, too, remains resolutely optimistic for the longer term: “The main thing is that Westport has always been a traditional domestic tourism destination . . . We’re hoping that will stand them in good stead so that the domestic market will come back to Westport very quickly.”