Wexford hotelier critical of ‘crazy’ labour laws and taxation rates Sunday, June 07, 2009 By Susan Mitchell Many more hotels and restaurants will go out of business unless the government introduces ‘‘clear, crisp initiatives’’ to stimulate the sector, hotelier Liam Griffin has warned.
‘‘We need a clear strategy from government. Frankly, it cannot come quickly enough,” said Griffin, the former Wexford hurling manager who owns the Ferry carrig Hotel and Monart Spa in Co Wexford and the Hotel Kilkenny. ‘‘The hotel industry is on its knees worldwide, not just in Ireland - but other countries are doing something about it.”
He said that the Irish hotel sector had been overdeveloped, largely due to tax breaks ‘‘that were let run too long’’, and there would be more casualties in the industry.
‘‘We have people advertising quality dinners for €5 on the Rosslare Road. It’s madness. Many places are just trying to buy cash to stay alive,” Griffin said.
He said that Irish businesses were dealing with a high Vat rate and energy costs that were one-third higher than in Britain and France. Wages in the Irish hotel sector were also much higher than in Europe, accounting for up to 45 per cent of a hotel’s revenues, Griffin said.
‘‘The labour laws are crazy. We need a root-and-branch reform,” he said. ‘‘The minimum wage in Ireland is €8.65 per hour; in the UK, it is €6.44; in Spain, it is €3.90.
‘‘The simple fact is that the minimum wage is too high. I want to pay a fair rate, but it needs to be competitive. The social partners have a massive case to answer. I am disappointed to see Fine Gael talking as much crap as Fianna Fáil about this,” said Griffin.
He also said that legislation that stopped people under the age of 18 from working after 10pm should be changed. ‘‘Who has the right to tell me that I can’t hire someone of 17 years of age to work after 10 o’clock at night? That is nanny state stuff,” he said.
‘‘Where do they think these young people go at 10 o’clock? Do they think they go home to knit with their mothers? They go to the local nightclub, where they are served all the drink they want.”
Griffin said that the government needed to start ‘‘thinking outside the box’’, and praised French president Nicolas Sarkozy for slashing his country’s Vat rate from 19.5 per cent to 5.5 per cent, on the basis that the hospitality sector would hire 40,000more people.
‘‘The Vat rate here is 13.5 per cent, and 21.5 per cent on drink. Yet we have a minister who says it is not really a problem, as he watches thousands of cars head to the border,” said Griffin.
‘‘In Greece, they have provided substantial loans to small and mediumsized businesses interest-free. They have brought in social tourism, whereby they have given people gift vouchers to take holidays in Greece. They have removed taxes from all local airports.”
Griffin called on the government to cut commercial rates in the downturn.
‘‘Rates are related to the value and profitability of a business. They should be reducing them. I will pay €1.45 million on Monart [Spa] over ten years. I get zero in return.”
The €30 million Monart Spa opened in 2006, and has received positive reviews in Ireland and overseas. However, Griffin said that his two hotels had higher occupancy rates than Monart last year, and would do so again this year.
‘‘Occupancy at Monart is running at less than 50 per cent; we had budgeted for the mid-50s.The peaks are good, but the troughs are not good enough,” Griffin said. Monart made a profit last year, and Griffin said management were budgeting for it to break even this year.
‘‘We didn’t expect it to contribute for a few years. We really wanted to do something different. Monart is not a hotel, although everyone refers to us as a hotel. We are a spa - and spent a huge amount of time developing the product. It is unique.”
Griffin said that occupancy rates had fallen across the group, leading to a fall in revenues last year. The group had revenues of €22.4 million in 2007, but Griffin said that figure fell by about 12 per cent last year, bringing it just under €20million.
Despite the fall, he said that the group recorded a profit last year, after moves to cut its costs and reduce prices. Room prices were down by about 25 per cent, staff had taken a pay cut of 10 per cent, suppliers had cut their prices, he said.
He said he could not ‘‘keep cutting costs indefinitely’’, but was confident that the group - and Monart - would ‘‘ride out the storm’’. He quoted a hotel industry magazine which said the recession would lead to a move away from opulence.
‘‘That is what we have done here,” he said. ‘‘We are no flash and brash corporate brand. We don’t want to be, as we feel that is over. I wanted a spa where my mother would feel comfortable asking questions. I didn’t want any snobbery.
‘‘It is hard to convince a market of four million people to come here and try it out, but when they do, they return,” he said.
‘‘We have a return rate of 67 per cent. I don’t think anybody else in the industry has seen that.’
|
Text-Only