‘Experience economy’ the focus of new Ibec campaign for State support
Businesses will fail unless Government provides medium-term help, lobby group says
No-gig economy: the entertainment and hospitality sectors have ‘borne the brunt of the Covid crisis’, says Ibec. File photograph: iStock
The Irish Business and Employers’ Confederation (Ibec) has warned that mass job lay-offs and business insolvencies are “inevitable” across the hospitality and entertainment sectors unless the Government steps in with further immediate help and a longer-term support strategy.
The employers lobby group has launched a campaign to raise the profile at Government level of what it terms the “experience economy”, which includes tourism, culture and sports venues, bars and restaurants.
Ibec has compiled a wish list of policy changes, including investment in marketing and skills development. Its campaign will include holding a discussion forum for businesses this week, as well as placing the sector’s revival at the centre of its “policy narrative” in discussions with the Government.
“The experience economy has borne the brunt of the Covid crisis and many thousands of businesses are now at risk of failure. These businesses need far greater certainty than what has been provided to date,” said Sharon Higgins, Ibec’s director of membership and sectors.
“The length of the public health restrictions has meant that business debt levels have risen sharply. Unless further measures are taken both before and in line with reopening, large scale business failures and redundancies are inevitable.”
Ibec says the “experience economy” is central to Ireland’s attractiveness as a place to work, live and invest.
The lobby group says, prior to the pandemic, €1 in every €3 spent by Irish households went on the sector, which compares to €1 in every €4 in other European countries. Irish consumers, for example, spend a share of their income on eating out that is twice as large as the average in Europe.
The sector supports up to 330,000 jobs, with a further 92,000 employed in the north. One in every five private sector jobs is provided by the sector, while businesses in this part of the economy spend €1 billion each year on food and drink from local suppliers.
Ibec’s policy wish list is broken down under three main headings, including measures designed to achieve an immediate “bounceback” once pandemic measures are eased off; investment in its workforce; and supports for developing the sector’s product range and its marketing.
Immediate measures sought by the lobby group include the removal of the €5,000 per week cap on compensation payable under the Covid Restrictions Support Scheme to businesses shut during lockdown periods.
It wants a medium-term commitment to tourism’s 9 per cent VAT rate until at least 2024. It also wants tax law changed to allow drinks suppliers reclaim excise charges on bad debts.
Ibec wants Ministers to devise a new skills strategy to address shortages of key workers in the sector – Irish hospitality outlets had severe difficulties hiring chefs, for example, prior to the pandemic. It also wants further State investment in management training.
Under its third policy heading, Ibec is seeking measures including a doubling of the State’s marketing budget for overseas tourism and investment in new tourism infrastructure and attractions. “Current levels of investment are inadequate,” it says.
Earlier this week, Central Bank governor Gabriel Makhlouf suggested that many businesses in the sector may fail once State Covid supports are withdrawn as the pandemic eases.