While it would be rash to declare the death of the pub, a growing number appear to be closing their doors and cashing in their chips as valuable properties, writes Una McCaffrey

Now you see it and now you don't - your local pub, once the hub of the community is now, increasingly, a luxury to be cherished before it fades away.

The driver behind this disappearance act is one of pure economics. On more and more occasions, and in more and more locations, it simply makes greater financial sense to shut up shop and sell the land than to keep trading.

Coupled with this tricky land valuation issue is the small matter of profits. While most pubs continue to make a tidy living, this is not the case for all involved in what can be a trying business.

Insolvency statistics compiled by accountancy firm Farrell Grant Sparks show that five pubs in the Republic went out of business in the first half of this year. It is a small number compared to the 80 or so construction and engineering firms that failed over the same period, but then pubs tend to be well-established businesses. Certainly, it does not paint a picture of a sector booming along with the economy.

Other figures point to the same analysis, with results for Dublin-based Capital Bars (covered in this newspaper earlier this week) highlighting some apparently bleak trading. The numbers, which cover some of the best-known bars in Dublin, show a loss of €18 million for 2005, up from €10.4 million in the previous year.

The company blamed tough conditions in the sector, a trend that some argue applies to almost all operating within it.

It is certainly true to say that times have changed in the business. Gone are the days of a few drinks in the local a few nights a week. Instead, we have more consumption, often of wine, at home.

"Maybe six or seven years ago, we all worked for eight or nine hours per day. Now it's much more, and we have less time to go to the pub," says Bill Morrissey of prominent pub auctioneers, Morrissey's. "Night-time entertainment is more limited to a weekend phenomenon."

Other factors are also at play: the smoking ban has encouraged home-drinking even more, as has the perceived crackdown on drink-driving. "For most publicans, the volume or profit today will not be as great as it would have been four or five years ago," says Morrissey.

In the background are the well-documented higher costs facing all businesses and consumers.

With on-sales consumption posting sluggish growth at best (a 0.6 per cent decline in volumes in the year to May), higher overheads can persuade pub-owners to look at options they may not have considered half a decade ago. Selling up is merely one.

Figures compiled by Morrissey's show that 18 pubs changed hands in Dublin city and county over the first half of this year. As a group, they were valued at €78 million. The figures only really mean something when one steps back to 2004, when the first year half produced 10 pub sales with a capital value of €27 million.

The increase of 188 per cent in the value of pubs sold (within a two-year period) tells its own story - a tale of the property boom.

Morrissey reckons that about one-quarter of the pubs sold in Dublin so far this year are going into "alternative use", with a similar trend apparent around the Republic. More often than not, this alternative use is the development of apartments or commercial outlets other than pubs.

Often these properties will be located in the countryside or the suburbs, locations hit hardest by the realisation that drink-driving is not an acceptable practice.

The most striking recent example of this shift to alternative use came in July with the €12 million sale of the Dollymount House in Dublin's Clontarf (see panel), but the pub's owners are far from alone in exiting.

Again in Dublin, Kevin Molloy of the Molloy Group decided to sell two of his flagship properties and to concentrate more on the off-sales side of his business and on his extensive property portfolio.

But, just as Molloy is, in his own way, the ultimate in modern publicans, there remains a large cohort of businesses in the sector that are doing very nicely indeed.

Louis Fitzgerald, head of one of the Republic's largest pub groups, is considerably more upbeat than many in the sector, and results for his company go some way to explaining why.

In the year to June 2005, the group, which owns Kehoe's in Dublin, the Quays in Galway and a score of other premises, had profits of €13 million, up from €8.4 million in the previous 12 months.

Fitzgerald (brother of Leo, the seller of the Dollymount House) acknowledges that it is sometimes hard these days for publicans to justify not moving on when the property price is right. Equally, however, he says the publicans who are doing well are probably being that little bit smarter than the others.

His group has, for example, located its newer premises (or selected its recent acquisitions) in areas close to transport links such as Dublin's Luas.

"We have to understand that people can't drive and go to the pub any more," he says. "In the suburbs, where you don't have the transport infrastructure, it's eating into business."

This latter factor can, however, be addressed in Fitzgerald's analysis. He suggests that pubs could allow taxi companies to set up in their (empty) carparks, thus providing a service in the same way that bookmakers traditionally operated from a pub's grounds. In this way, customers can be facilitated in their search for alternative transport arrangements.

Like every good publican, Fitzgerald also believes that home-drinking is becoming more "boring" for consumers as time goes on. "In the last three months, I've noticed turnover coming back, although not to the levels of a few years ago," he says, judging that the above factors are at play.

"Publicans shouldn't get suicidal," he says, adding that he is "quite happy with his lot" even if business isn't booming just as it was in 2000. Informed sources in the market suggest that Capital Bars may not be doing quite as badly as the firm's accounts would suggest.

Somebody who isn't quite as content as Fitzgerald is Paul Stevenson, president of the Vintners' Federation of Ireland, the representative body for 6,000 publicans outside Dublin.

Stevenson, himself the owner of a pub in Ballymote, Co Sligo, reckons that in 2004 and 2005, more than 600 of his members sold up and exited the trade.

He blames the heady mixture of social change and increasing property valuations for the shift. He also reckons that there are simply "too many licences" in the business and says that costs have "sprialled" beyond acceptable levels. In particular, he highlights local authority charges and waste charges, both of which have racked up double-digit annual increases over the past few years.

"The figures don't stack up," says Stevenson.

He does not, however, accept that the cost of going to the pub presents a similar problem for consumers.

He points out that the businesses doing well are those that offer food as well as drink, or entertainment packages.

"Pubs need to become more business-oriented," says Stevenson, perhaps offering a better analysis of the situation than any collection of statistics or studies.