THERE WILL BE a “tsunami” of closures in the hospitality sector if the Government doesn’t step in to help, one restaurateur has warned.
Jamie Budd, who runs Budds restaurant in Ballydehob in Cork, said many businesses are “busier than ever” but still “in the red” due to rising costs.
Budd is among the business owners from the hospitality and tourism sectors due to take part in a protest outside Leinster House this afternoon.
The rally is part of a ‘day of action’ which aims to highlight the “unsustainable cost” of doing business in these sectors.
It is being organised by the Restaurants Association of Ireland (RAI), the Vintners’ Federation of Ireland (VFI), and other groups representing small and medium enterprises (SMEs).
Budd told The Journal the demonstration is a “cry for help” from the industry, asking the Government to intervene “before we see an absolute tsunami of closures”.
We’re all really busy, we’re busier now than we’ve ever been and we can’t make any money whatsoever – it’s virtually impossible. We’re living week to week.
Budd’s restaurant has been in business for nearly a decade and made a small profit – which he said was reinvested into the business – every year until two years ago.
“Energy costs have gone through the roof, more than doubled. Your produce costs have more than doubled. The wages have gone up considerably.”
Budd has increased the prices in his restaurant in a bid to stay open, but said he can’t do that indefinitely.
“How much can you charge before a customer just doesn’t come in anymore?
“We’re already finding that, with the increases, a lot of people are just not able to afford to come in anymore.”
Budd was among those calling for the Government to reduce the VAT rate for the hospitality sector from 13.5% to 9%, saying this would have made a “huge” difference.
However, no such reduction was included in Budget 2025.
VAT for the tourism and hospitality sectors was reduced to 9% during the Covid-19 pandemic at a cost of €1.2 billion to the Exchequer. The rate reverted back to 13.5% in August 2023.
Budd described the Government not reducing the VAT rate – while at the time increasing the minimum wage by 80 cents to €13.50 per hour – as “a slap in the face”.
In terms of the supports received in the Budget, Budd said the €4,000 energy subsidy averages at €77 a week and will not make any significant difference to costs.
Budd said Ireland has built up “a massive reputation” in the last 20 years in the food and hospitality industries.
The last thing any of us want to see is all these beautiful, amazing, independent hospitality businesses go to the wall.
Budd will be among the speakers at the demonstration in Dublin later today.
Protesters are expected to gather at Upper Mount Street at 1pm, before marching by the Department of Finance and then holding a rally outside Leinster House from 2 to 4pm.
Speaking after the Budget was announced on 1 October, Minister for Enterprise, Trade and Employment Peter Burke said he had secured €170 million for “a significant and meaningful intervention” that would help SMEs.
He said these measures included increases to the VAT registration thresholds that apply for the supply of goods and services (to €85,000 and €42,500 respectively), an increase to the earned-income tax credit, and changes to retirement relief.
Burke said the minimum wage increase, which will kick in on 1 January, “reinforces our commitment as a Government to find a balance between a fair and sustainable rate for low paid workers, and one that will not have significant negative consequences for employers and competitiveness”.
“The increase in the minimum wage should be considered as part of the overall budget package in tandem with the measures I have secured to support SMEs.”
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