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Covid-19 effect ‘reasonable’ on Clare business but ‘could be as catastrophic as 2008 recession’

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*Ennistymon. Photograph: Martin Connolly

There has been a “relatively easonable” short-term impact on business in Clare since the outbreak of coronavirus however the long-term effect “has the potential to be as catastrophic for business as the Lehman collapse,” one hotelier has warned.

A day by day approach is being followed by several businesses across all industries in the county. Speaking to The Clare Echo, Michael Vaughan admitted the impact on the tourism and hospitality sector is very hard to predict.

“So far the effects have been relatively reasonably, there has been a lot of cancellations of functions and gatherings in the run up to the last week. I’ve spoken to a restaurant owner who said their turnover is down about five percent on where they would have been last year, that is not too bad. The big worry is as we move further into the containment phase, people will be afraid of going out and they won’t be socialising as much. The cancellation of the St Patrick’s Day Parade will have a particular affect on pubs, restaurants and hotels in the next week or two, that is the kicking off of the tourism season”.

Cancellations have been noted in Clare accommodation providers, some of which for April in Lahinch particularly. “We’re not seeing any cancellations into the summer yet, we’re hopeful the worst will be over by the time the main season goes ahead. You couldn’t rule out the fact that this has the potential to be as catastrophic for business as the Lehman collapse back in 2008, anyone I’m talking to in business is foreboding about it”.

Prior to the DDF Irish Open in Lahinch last summer, Michael estimated to The Clare Echo that it would bring a €5m benefit to North-West Clare. Before Covid-19, he admitted Vaughan’s Lodge had “the best booking season that we could have in the fifteen years that I’ve been in business here in Lahinch, this winter was the best overall booking for the year ahead that I’ve seen”.

“We would be confident up until now of a very good season, that is on the back of having invested significant money and adding ten new rooms to the back of the hotel. This couldn’t have come at a worse time for businesses like mine who have just expanded or have reinvested in their product, you’ve added fresh debt onto the business but you were hopeful of paying it off, at the same time if confidence goes out of the market, we will see things change very fast”.

A confirmed cases of coronavirus in the region may undo some of the positives brought to the region from the Paul McGinley hosted European Tour event last July but Vaughan remained optimistic. “Golf is one of those activities that is the last thing people would cancel, a famous promoter of golf Paddy O’Looney said ‘Irish golf was bombproof and recession proof’, I’m not too sure it wouldn’t be contagion proof. It depends on the mood of the American population at the time and how they feel, the British population is in the same state of affairs as ourselves, people are expecting less traffic from the UK this year, we were hoping for an increase of four percent in American traffic this year to make up for the loss of European business that will happen as a result of restrictions.

“It depends how soon things go through, if we can get a handle on this by the end of April, we have a good chance of saving the season, if the figures turn out to be really bad in terms of illness and restriction we could have one of the worst seasons that we’ve ever had. It’s a moment of real fear among people in business at the moment, most people in business are trying to see what kind of reserve they have in order to stay open, the attitude of the banking sector is critical and the Government in terms of what supports they can put in place to help businesses stay going. Most of the businesses in Clare are profitable businesses but when cash dries up and you haven’t the cash to pay wages that is when a business fails”.

Businesses’ biggest concern is staying open, paying bills and providing employment, the fourth generation hotelier stated. Hotels in the region have also been put on notice by future guests that they may have to cancel their booking while tour promoters have unsuccessfully wrangled to get a 20 reduction on their stay in parts of North-West Clare. “It will pass and there will be the bounce hopefully, the main worry for everyone is can we keep our staff safe, can we guarantee the guests that travel to stay with us and at the moment those questions are not answerable”.

To aid businesses in trying to keep their doors open, the former President of the Irish Hotel Federation suggested that local authorities defer the payment of rates, the Government put the payment of VAT and PRSI on a longer term payment plan and that social welfare assist with payments of staff where possible. “A number of businesses may have to shut for a number of days or may find that they can only open on weekends when there is some business around,” he concluded.

Páraic McMahon is Head of News & Sport with The Clare Echo. The Newmarket-on-Fergus native also writes for national papers including The Irish Examiner, The Irish Independent and The Irish Times along with doing work for RTÉ, Today FM, TheJournal.ie and The42.ie. A graduate of Mary Immaculate College, Páraic was previously employed by The Clare Herald and Clare FM. If you have a story, tip or some feedback for him then send an email to - paraic@clareecho.ie

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