Over 2,000 fewer jobs expected in midlands hospitality sector

The drinks and hospitality industry is set to provide almost 2,000 fewer jobs in 2022 in the Midlands, a new report has found.

Analysis published by the Drinks Industry Group of Ireland (DIGI) shows that nationally, 140,000 people will be employed by drinks and hospitality businesses in 2022 - 40,000 fewer than in Q4 2019, the last pre-pandemic quarter.

Among the 40,000 fewer jobs are an estimated 12,700 15–24-year-olds and almost 22,000 women.

In counties Longford, Westmeath, Offaly and Laois, DIGI estimates almost 2,000 fewer jobs including 630 among 15-24 year olds.

In total, 8,800 people are employed in the drinks and hospitality industry in the Midlands.

The analysis comes despite the broader economy’s ongoing recovery as the country approaches full vaccination.

DIGI's estimates are based on analysis of the latest industry employment report, Structure and Performance of National and Regional Employment in the Hospitality Sector of Restaurants, Hotels and Public Houses, researched and authored by DCU economist Anthony Foley. Foley’s report shows that the accommodation and food service sector, which includes most drinks and hospitality businesses, employed almost 180,000 people in the last quarter of 2019.

However, DIGI predicts that the likely substitution of some staycation demand with overseas sun holidays, some element of consumer reluctance, and the overall weaker national and international demand for travel and tourism—which in Ireland heavily involves drinks and hospitality businesses—means some pubs, restaurants, and hotels will not return to their pre-pandemic employment levels in 2022.

In response, DIGI has called for the Government to reduce Ireland’s excise tax rate, which is the second highest overall in Europe, by 7.5% in October’s Budget.

“Ireland’s high rate of excise, which represents a significant cost, is forcing drinks and hospitality businesses to make growth-limiting sacrifices,” said Liam Reid, Chair of DIGI and Corporate Relations Director at Diageo Ireland.

“At such a precarious time for the industry, every euro matters. Money taken by the Government in excise tax is money that could be spent by pubs, hotels, and restaurants on recovery and investment.

“A 7.5% reduction in excise tax would have an immediate impact and mean more money for businesses to weather what is likely to be a difficult year and, potentially, maintain current staffing levels, hire new staff, invest in premises, and improve product and service offerings to the benefit of domestic and international consumers. Crucially, it will greatly support the industry to maintain the predicted 140,000 jobs.”

According to DIGI, Dublin is likely to have 11,690 fewer drinks and hospitality jobs next year compared to Q4 2019, the largest figure among all Ireland’s regions. However, many rural communities are largely or wholly dependent on tourism, much of it seasonal, for jobs and revenue.

In Q4 2019, the last quarter unaffected by the pandemic, in the Midlands region, which includes the counties of Longford, Westmeath, Offaly and Laois, 6.6% or 8,800 of the adult population were employed in drinks and hospitality jobs (in Westmeath, 5.6%). However, DIGI predicts almost 2,000 fewer jobs in the Midlands in 2022 compared to Q4 2019, including 630 among 15-24 year olds. 8,800 people are employed in the drinks and hospitality industry in the Midlands.

The situation is similar in other regions. DIGI predicts 3,730 fewer in the West; and 3,690 fewer in the South-East.

Some population groups are more vulnerable to this contraction than others. In Q4 2019, women comprised the majority, 54%, of those employed in drinks and hospitality, compared to 46% in total employment; in the Midlands region, 67% of all drinks and hospitality employees were female. The sector is also relatively young: in Q4 2019, 31.8% were between 15 and 24 years of age, compared to 11.2% in total employment.

“Only by making it easier for the drinks and hospitality industry to do business can Ireland avoid a two-tier recovery, where work-from-home multinationals and professional services companies emerge from the pandemic relatively unscathed, even better off, and the most important domestic industries are left struggling,” said Mr Reid.