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Kathy Sheridan: Tide of goodwill towards the restaurant sector may soon turn

Inexplicably high prices, unhappy staff and opaque service charge will take their toll

An acquaintance is still smarting months after paying more than €100 for a couple of dishes – pasta and a steak – plus three glasses of ordinary wine and a single coffee while sitting outside a mid-range restaurant at 7pm on a Wednesday in spitting rain. The final benefaction was to be waved towards an ATM down the street for cash because the restaurant was no longer accepting cards. On previous experience, this customer had reckoned on about €80, which on an ordinary weeknight for most mortals still amounts to a splurge. His story has become common enough to suggest the initial tide of goodwill towards the sector may be turning.

Meanwhile, the latest drumbeat from the industry is about a crisis in recruiting and retaining staff. Criticism is probably the last thing it needs.

Workers have fled elsewhere in their tens of thousands and up to 30 per cent of tourism and hospitality businesses say they could face closure if something isn't done

But Ireland has been remarkably faithful to it through good and terrible times. In the 10 years following the economic crash, it was second only to Malta among European Union countries for the fastest increase in the eating out stakes. By 2018, it was topping all EU spenders in the category. A remarkable 15 per cent of Irish household budgets was spent on catering services – restaurants, cafes, canteens, etc – at a time when the EU average was under half that, according to Eurostat. And that was despite the eye-watering prices. In 2020 only Switzerland and the Nordic countries outperformed Ireland for restaurant and hotel prices; Ireland’s were 28.5 per cent higher than the EU average.

From all that positive affirmation a Martian visitor might infer that operators were grappling staff to their souls with hoops of steel. Yet workers have fled elsewhere in their tens of thousands and up to 30 per cent of tourism and hospitality businesses say they could face closure if something isn’t done. By whom? One obvious problem is pay.

More than two in three workers in the sector earn less than the living wage, according to new research by Fáilte Ireland, meaning they earn less than €12.90 an hour, with predictable consequences in a world where affordable accommodation or a mortgage are somewhere at the end of a rainbow.

But that is not the only problem.

In other new research, workers complain of long or unsocial hours for bad pay, “condescension” from customers and poor treatment from managers. This is hardly news. Pre-pandemic research into the experience of hospitality workers by Dr Deirdre Curran of NUIG reflected a culture of ill-treatment that included widespread sexual harassment, bullying, verbal abuse and breaches of employment rights. Workers were “crying out for protection”, she told an Oireachtas Committee in October 2019.

At this point, it is mandatory to mention the many good employers out there who treat staff as family. Most of us know at least one. It takes grit, creativity, stamina and ballet-style pivots to run a consistently good restaurant. But where are the authoritative industry voices talking out loud about the root-and-branch job that needs to be done? Some excellent restaurateurs feel the industry was ill-served by those perceived to be representing them all during the pandemic. The constant carping and inability to read the room became a background thrum when a fearful public needed reassurance above all.

In fact, a hotel or restaurant is legally, fully entitled to keep that 'service charge' – but we know this only because of trade union and media campaigns

The thrum included initial criticism of desperate restaurateurs pivoting to takeaway (unsafe, said the thrum, profiting from the misfortune of others who had to close); ill-judged campaigns to reopen indoor dining against a tide of public fear; heavy suggestions that vaccine passports were unworkable and a breach of customers’ constitutional rights. It was the opposite of reassurance.

In many ways, the ongoing row about the so-called “service charge” crystallises a certain industry attitude. For most customers, the service charge – separate from menu prices, often in small print, arbitrarily imposed – is only tolerable because they understand it to be a tip by another name.

In fact, a hotel or restaurant is legally, fully entitled to keep that “service charge” – but we know this only because of trade union and media campaigns. It is normal business revenue. Who knew?

The welcome new Payment of Wages (Amendment) (Tips and Gratuities) Bill 2022, will make the practice of withholding card tips, or using them to pay wages, illegal. It will oblige businesses to display their tips, gratuities and service charges policy. But the service charge remains. Its exclusion from the Bill is deemed a major win for employer representatives.

Lest you, as customers, have any doubts: “A service charge is levied by the business on a customer, who does not have the right to determine the amount of the charge . . . [nor] how the employer treats this income stream,” Irish Hotels Federation chief executive Tim Fenn told a slack-jawed Joint Oireachtas Committee in 2019. “It is not for me to tell a business what to do with the service charge,” said Restaurants Association of Ireland chief executive Adrian Cummins, in a rare bout of shyness. “Essentially, it is a hidden charge or a top-up. Why is it not included in the menu price in the first place?” asked deputy John Brady. “Is a service charge not a complete con job?” wondered Senator Paul Gavan.

Some might view all this as a public relations failure but it goes well beyond that. If prices continue to rise for fairly ordinary dining experiences while the industry ignores the humans at the heart of its crisis, faithful customers will start paying attention. And that can only go badly.