How we feel now
How we feel now
The BDO Hospitality Sector Sentiment Survey was conducted over a two-week period, commencing 11 August 2021. The survey received a total of 983 responses from a sample of bars and restaurants, drawn from the membership of the Licensed Vintners’ Association, the Restaurants’ Association of Ireland, and the Vintners’ Federation of Ireland. It should be noted that a large number of responses came from members of the Vintners’ Federation of Ireland, whose membership base is drawn from publicans operating outside Dublin. It is apparent from our analysis of these responses that overall sentiment from this cohort is weaker than that expressed by Dublin publicans and restaurants.
We got a tremendous response, with almost 1,000 respondents: clear evidence of the sector wanting its voice to be heard, and to raise awareness of the issues and challenges – Covid and non-Covid related – that it is facing.
For me, there are a couple important takeaways from the research. One of the most notable findings was the fact that approximately 40% of respondents said that they do not have a business plan. Now more than ever, businesses need robust business plans to not only navigate their way out of the Covid crisis, but to help sustain and grow the business. Since the crisis began, we have been working with Fáilte Ireland – who have an extensive suite of supports available – and a number of our hospitality and tourism clients to adapt and repurpose their business plans in response to Covid.
A positive takeaway from the research is the fact that 55% of respondents have indicated that they plan to invest in their businesses. Business and financial planning very much come hand in hand and for those businesses that are looking to access bank or debt funding. To fund the cost of this investment, a robust business and financial plan will be a prerequisite for any funder or lender.
A good relationship with banks and lenders is imperative, especially in times of a financial challenge/crisis. It was interesting to note that over one in four respondents rated the support that they received during the Covid crisis as bad, so there may be some work to do to repair some relationships between some businesses and their funders. We have a lot of experience advising clients in this area and can support them as they look to access additional finance or restructure existing bank debt.
After an incredibly difficult period for the hospitality and wider tourism sector, it is positive to see that 63% of respondents plan to recruit additional staff over the next six months. A key challenge will be the extent to which there is a suitable pool of labour to fill these positions. Fáilte Ireland’s new recruitment marketing and awareness campaign, which aims to attract new staff to the tourism industry, is likely to be a very important market intervention.
Finally, it is great to see that the vast majority – 93% – of businesses expect to be in business next year. The likelihood of this happening will be greatly increased, whereby those who don’t have a plan address this deficit in their business access the continued support of some of the key industry supports that have been in place over the last 18 months. It’s all about the need to plan for various contingencies and scenarios, lower volumes of business, a gradual/phased reduction of the various supports, and the difficulties associated with a tight labour market and skills shortages.
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Content adapted from Hospitality Ireland.