Shane Mclave General Manager

Shane McLave on Budget 19: VAT increase for hospitality industry ‘reckless’

The Restaurant’s Association of Ireland has called the Budget ‘thoughtless’, a sentiment that will be shared with many in the hospitality industry this week as they begin to do the sums on how the VAT increase to 13.5% will affect their business.

I, and Excel Recruitment, have always supported the campaign to KeepVatat9 and while expected, feel Tuesday ’s decision by the government was absolutely the wrong one. The Minister for Finance showed not only a lack of understanding on the difficulties faced by the industry- particularly rural and border area businesses but also complete disregard of the importance a buoyant tourism industry to the wider economy.

Budget 2019 was most certainly an election budget. While social housing and healthcare are hugely important and deserve as much funding as possible where these increases have come from have not been thought through- or fairly distributed, with employers being forced to pick up the bill. It’s not a case of business in general being hit. Most companies, including some of the country’s most profitable were unaffected by the Budget while landlords with hundreds, often thousands, of properties and few employees escaped any tax hikes at all.

‘These are the businesses that need to be protected- not placed under further pressure’

In contrast, small and medium businesses such as family-owned pubs, cafés and restaurants are going to take a big hit over the next year. These are actually the businesses that need to be protected- not placed under further pressure. Many are located in rural areas and are vital to employment and life in their local areas.

These businesses were also hit with the news that minimum wage will be increased to €9.80. It’s great that workers on minimum wage will receive an increase but on the flipside, employers are now facing an increase in VAT, an increase in minimum wage and increased employer’s PRSI. To add to the pain, both increase come into effect in January, typically the sector’s quietest month.

While the industry is far healthier than it was when the 9% rate was introduced, it still faces many challenges particularly with Brexit looming and still no idea of what the implications will be on our sector. The tourism industry has already weathered the storm of the recession and is one of our most important indigenous industry- supporting economies and creating jobs across the country. This decision is irresponsible and recklessly endangers one of the country’s biggest employers.

East meets West: Solving the Chef Crisis

Many people within the hospitality industry lament the lack of chefs in Ireland, with everyone having their own opinions and perceptions on the reason behind the low, and falling, number of chefs working in Ireland.

I myself have spoken and written about the issue many times, but as the problem reaches epidemic levels- who is actually doing anything constructive in order to try and resolve the issues?

As a proud and active member of the Restaurants Association of Ireland, I was delighted to get the call from Adrian Cummins to assist them with their latest recruitment drive. I have travelled to Korea to attend the World Job+ Recruitment Fair at the Seoul International Travel Mart 2018 (SITM) to meet and interview prospective Chefs who are interested in coming to Ireland on the new Chef Work Permit scheme, announced earlier this year. The new regulations came into effect in March this year, removing some chef grades from the ineligible occupations list and making it easier to recruit chefs from outside the EU. The is an overall quota of 610 employment permits available.

Even though it’s been a few years since I was last in my whites on a full-time basis, the Chef inside me was really excited to come to this corner of Asia. As my only previous experience of Korean cuisine came from eating on Dublin’s Parnell Street, I was excited by the prospect of trying as much of the local cuisine as possible and I have to say I was not disappointed in the slightest. The bustling but pristine streets are filled with the amazing aromas coming from street food stalls, fresh produce on display and live prawns and octopus in the tanks, a stark contrast to the mammoth New York-style skyscrapers y towering above and the familiar four and five star hotel chains that you would expect to see in Paris, London or Dublin.

And what of the Chefs?

Koreans by their nature are extremely hard working, knowledgeable, diligent and creative and this really comes across when you talk to the chefs. They are connected with food and take great pride in the skills that they gain in Culinary College and their careers, most of the Chefs have a good level of English and the main reason for wanting to come to Ireland seems to be to further that knowledge. I have met with a considerable amount of Chefs and there is great interest amongst them in coming to Ireland. Although the initial permit will be for two years, most of them are already planning to extend this further as even though there are countless restaurants in Seoul it can be difficult gaining employment opportunities and advancement in a city with over 10 million people.

If you are struggling to hire Chefs or retain them for long periods and want to find out about how Excel Recruitment can help you through the work permit process please do not hesitate to contact me for more details.

hotel jobs

New study shows rising costs for hotels due to staff shortages

A new study has highlighted the risk of rising staffing costs for hotels as the industry faces fierce competition for staff in an economy with falling unemployment.

According to Crowe Ireland’s annual survey of Ireland’s hotel sector, the industry has seen increased turnover for the seventh consecutive year and is reaching record profitability, record occupancy and record room rates in all regions across the country. The annual Crowe Ireland survey of the country’s hotel sector said that the industry has enjoyed the seventh consecutive year of increased turnover.

The survey found that average room rates across the country rose 6.9% last year compared to 2016. In Dublin, the average room rate was 6.8% higher at €136.96. The pace of growth in average Dublin room rates last year was half that recorded in 2016, despite just 237 new rooms coming on stream. In the southwest and western seaboard, average room rates soared 8% and 9.7% respectively to €100.67 and €87.49.

Luxury hotels saw room rates rise 6.2% to €218.02, a new record. Economy hotels saw the biggest growth in average room rates, which rose 11.8% last year to €68.43.

The survey found that Dublin hotels increased their profits by 12%. Profits at hotels in the southwest jumped 17.4% on average, and by 17p% along the western seaboard. At hotels in the midlands and east, profits were 13.9% higher on average.

While this profitability is welcomed, it puts the special 9% VAT rate for the hotel industry , introduced by the Government in the depths of the financial crisis, under scrutiny as budget day approaches.

In a review of the 9% rate , the Department of Finance said it had cost the Exchequer €2.6bn since its introduction in 2011, and was now a “significant deadweight”. The Department said the reduced rate cost €490m in 2017.

Crowe Ireland partner Aiden Murphy said that payroll cost increases were the most significant threat to the hotel sector’s profitability.

The falling unemployment rate in Ireland means the premium that hotels must pay for staff above minimum wage “will have to increase”.

“There is a concern that the payroll cost for hotels, which was 34.5pc of revenue in 2017, could return to much higher levels,” he said. “Going back seven years, it would have been as high as 38pc or 39pc.”

The minimum wage currently stands at €9.55 an hour but just last month, the government agreed that the rate will rise to €9.80 from next year, following a recommendation from the Low Pay Commission. Mr Murphy said that hotels typically pay between €1 and €3 an hour above minimum wage.

Mr Murphy also said that the cost of living and accommodation in particular could push hotel workers in Dublin to move to hospitality jobs outside the capital.

“There’s a concern for certain staff in Dublin about the cost of living increasing,” he said, pointing out that workers at regional hotels would find the cost of living much lower.

Ballyfin Demesne named Irish hotel of the year

 

Ballyfin Demesne has been named the AA’s hotel of the year 2018.

The five star hotel in Co. Laois is a former boarding school which underwent an extensive nine-year restoration before opening as a luxury hotel in 2011. It stands on 600 acres of grounds and is home to a series of formal gardens designed by Jim Reynolds. The hotel was previously voted best hotel in the world in 2016 by readers of US travel magazine Conde Nast Traveler.

The B&B rate at Ballyfin starts at €960 for a double room, running to €1,710 for the best suite in the house. Most guests, however, opt for the full board package (from €1,275 for two people), which includes lunch or afternoon tea on arrival, cocktail hour, dinner in the State Dining Room or the Van Der Hagan Room, and breakfast the following morning.

Until 2015, Ballyfin was open only to residents, however reservations are now accepted for dinner for groups of up to six guests, who have variety of menu options to choose from, costing from €105 for three-courses à la carte, to €125 for an eight-course tasting menu.

Shane Ross, Minister for Transport, Tourism and Sport, presenting the award to Ballyfin’s general manager Damien Bastiat in Dublin last night, said: “The story of Irish tourism over the last 10 years has been one of hard work and perseverance to get through the troubled times of the economic downturn in order to come out the other side as a thriving industry. “Ballyfin Demesne, with its welcoming staff and steep history only highlights the best of what the hospitality industry offers to visitors from at home and abroad.”

The other main award winners were Aldridge Lodge in Duncannon, Co Wexford (AA Guest House Accommodation of the Year), and The Twelve hotel in Barna, Co Galway (AA Courtesy and Care award).

New 134 room hotel planned for Galway

Press Up Entertainment, Ireland’s largest and fastest growing pub and restaurant group, are said to have acquired a site in Galway with planning permission for a 134-bedroom hotel.

The site is located near Prospect Hill received planning permission for a hotel last year following an application by Highgate Properties. It is understood Press Up paid €4.5 million for the land. In addition to the bedrooms, there is permission for two bars within the building, which will ultimately have a total gross floor area of 5,310sq m. The acquisition comes as Press Up eye opportunities to expand into the UK market in the near future.

Press Up is the largest restaurant and venue group in the country and the group behind well-known restaurants such as Captain America’s, Roberta’s and the Dean Hotel. Press Up, which last year had a turnover of about €52 million, has said it hopes to open at least nine new hospitality venues over the coming year, including the Devlin hotel in Ranelagh, Dublin, which will open in the summer.

The group is also reported to be developing a 140-bedroom hotel in Cork. It is also planning a revamp of former private members’ club Residence on St Stephen’s Green, which it purchased recently. In addition, Press Up will soon open a cocktail bar in a three-storey building on Dublin’s Aungier Street, which company documents suggest will be called The Dutch Billy. The group’s other recent purchases include the well-known Elephant & Castle restaurant business in Temple Bar.

Job vacancies in hotel sector increased 200% in last five years

Job vacancies in the hotel sector have increased by almost 200% from 2013- 2017 according to jobs.ie

The job board said demand for key hotel roles such as hotel chef, bartenders, waiters, receptionists, porters, cocktail mixologists and concierges have all increased hugely. Every role has experienced growth in the last five years, particularly since 2016. Vacancies for hotel chefs increased by 149 percent over the five-year period and although vacancies were down by 9pc in 2017 compared to 2016, the number remains high. Hotel bartending, mixologist and concierge vacancies all soared by 80 percent in 2017 compared to just the year before.

Ireland’s hotel sector has demonstrated remarkable resilience,” said Christopher Paye, general manager of jobs.ie. Despite a drop in visitors and revenue from the crucial British market, 2016 proved to be a turning point for the sector, thanks to rising numbers of tourists from the rest of Europe, North America and Asia. Paye continues, “However, there is a mounting risk that demand for workers will outstrip supply, and this is already proving the case for chefs,” and he warns the growth of Ireland’s tourism industry will be “short-lived” if the skills shortages are left unaddressed.

The hospitality sector is worth €7.2bn to the Irish economy and supports an estimated 235,000 jobs. There was welcome news for the sector last week when Minister for Business, Enterprise and Innovation Heather Humphreys announced changes to employment permit regulations which saw the removal of certain chef grades from the ineligible occupation list. These changes will make it easier to source chefs from outside the European Economic Area.

Meanwhile, hotel group Dalata has said it expects to add some 300 jobs in Ireland this year thanks to the opening of three new hotels, two in Dublin and one in Cork. The new properties are expected to open by the end of the year.

Hospitality industry welcomes relaxed work permits for chefs

The hospitality industry has welcomed changes to work permit regulations that aim to make it easier to hire chefs from outside the European Union.

The changes remove some chef grades from the ineligible occupation list, meaning that if an employer has difficulty filling a vacancy they can look outside the EU for a suitably qualified person. The grades that were taken off the ineligible list include executive, head and sous chefs with a minimum of five years’ experience at that level, and chefs de partie, with a minimum of two years’ experience at that level. A quota will apply to the scheme, with a limit of two general employment permits per establishment and an overall quota of general employment permits of 610.

The decision was signed off by Minister for Business, Enterprise and Innovation Heather Humphreys. Speaking about the decision she said, “My decision to remove certain chef grades from the ineligible lists will ensure that there is a mechanism to address the shortage of qualified chefs in the short term,” she said. “I have applied a quota to ensure that in the longer term the demand for chefs is met from a steady supply in the Irish labour market and, to that end, I am aware of the work that is underway to increase the supply of chefs through training initiatives such as the development of a new commis chef apprenticeship and a chef de partie apprenticeship.”

The Restaurants Association of Ireland (RAI) welcomed the changes. “The hospitality industry in Ireland has been under significant strain in recent years in regard to staffing, and allowing more skilled professionals to enter the industry can only encourage further growth in this sector,” said Adrian Cummins, chief executive of the RAI. “The Restaurants Association of Ireland has been lobbying on this issue since 2012. There is an urgent need for 7,000 chefs per year to service our industry.”

The RAI previously warned the shortage of chefs was growing at a rate of 3,000 per year due to a lack of training places, and it had called on the Government to relax the work permit restrictions. The association claimed the shortage was limiting the expansion of the hospitality industry.

 

IHF Conference- The Key Take Home Points

Not even the looming threat of the Beast from the East could put a damper on the success of the Irish Hotel Federation’s annual conference last week. Held in the Slieve Russell Hotel, the conference included a fantastic line-up of speakers, interesting insights and informative discussions. General Manager of Excel Recruitment Shane Mclave talks through the main talking points from the event.

2017 success for the industry

There was plenty of positivity new stories from the event. According to IHF chief executive Tim Fenn, 2017 was another strong year for Irish hotels and guesthouses and the seventh year in a row that overseas visitor numbers have grown. The average national room occupancy rate was 73% during the year, a figure driven by a substantial increase in visitor numbers from the US and continental Europe, as well as from the domestic market. This was welcome news for hoteliers and helped to offset the drop in visitors from the UK, where numbers continue to fall. Fenn asserted that the outlook for the sector remains positive with hoteliers confident about the future growth of the tourism and hospitality industry.

Craic alone not enough for tourism

Niall Gibbons of Tourism Ireland also discussed the dramatic drop in British visitors and said “the craic” won’t be enough to recover plummeting visitor numbers. Mr Gibbions said Ireland must hone in on outdoor activities to entice visitors from Great Britain, which is the country’s biggest tourism market. Visitor numbers from Britain have fallen steadily since the Brexit referendum vote in June 2016 and dropped 6% last year to 4.7 million visits. As a result, tourism officials have focused more on opening up ‘emerging’ markets like India and China and winning more business from North America and mainland Europe. Tourism chiefs are hoping to look beyond traditional boozy holidays and hope to win more business in the activities market. Daragh Feighery who will be opening the much anticipated Center Parcs in Longford gave us a sneak peek at what is in store for what will be a huge jewel in the crown for the Midlands with over 1000 staff in employment once the doors are open to the public mid-2019

End to the Chef Crisis in sight?

One of the most exciting talking points from the conference came from TD Brendan Griffin, Minister for State and Tourism. The TD casually mentioned that changes to work regulations for work permits are on the cards for 2018, potentially easing the country’s chef shortage. The statement was met with huge support and enthusiasm from all, particularly hoteliers and business owners all too familiar with the struggle of recruiting and retaining chefs.

Salary Series 2018- Chef Salaries

Excel Recruitment are delighted to release our 2018 Salary Survey. Our Salary Survey covers all aspects of the Hospitality Industry including Hotel, Chef and Industrial and corporate Catering salaries. In a series of blog posts, Excel’s expert team give their take on the year ahead and the factors affecting salaries in each industry. In To view our Hotel and Catering Salary Survey in full click here. To get General Manager Shane’ McLave’s take on hotel salaries and the effects of Brexit, click here.

The Irish hospitality sector’s chef crisis continued to dominate industry news and discussion last year, a nowhere near new phenomenon that looks to set to continue right through 2018. Businesses of all levels, shapes and sizes are continuing to struggle to attract, recruit and retain a quality of chefs at all levels. While there is much back on forth on about the issue and many solutions suggested, such as re-instating Cert qualifications or promoting apprenticeships, it needs to be stressed that much of the issue is centred around the industry standard pay rates for chefs.

The Average

Chef pay rates are again going up but they are still well short of the average industrial wage which is €36,000 per annum. In most establishments, chefs have to manoeuvre themselves into a management position in order to achieve that salary. The increase in minimum wage which came into effect in January will further highlight the issue as hourly rates above this will be expected to increase in line with the 30c increase to the minimum wage.

The Solution?

There are exceptions, as we are seeing savvy operators within the Hotel and Restaurant sector offering very attractive packages to attract and keep talented chefs. They can see by increasing the salaries they are seeing the benefits of a higher calibre of staff, greater retention and a lower turnover in talent. Retaining staff will be a major objective of businesses in 2018 as recruitment looks set to remain a highly competitive, candidate’s market. We’re already seeing business work hard at this through a mixture of reward and progression.

 

Salary Series 2018- Hotel Salaries

 

Excel Recruitment are delighted to release our 2018 Salary Survey. Our Salary Survey covers all aspects of the Hospitality Industry including Hotel, Chef and Industrial and Corporate Catering salaries. In a series of blog posts, Excel’s expert team give their take on the year ahead and the factors affecting salaries in each industry.First up, General Manager of Excel Shane Mclave discusses hotel salaries and the effects of Brexit. To view our Hotel and Catering Salary Survey in full click here. To get consultant Laurence Roger’s take on the much-discussed issue of Chefs salaries, click here.

It’s been an interesting year for the hospitality sector in general, and the hotel industry in particular. Brexit and all its consequences, both real and potential, were on everybody’s mind. Its first effects were definitely felt with a 54% decrease in the national average of UK visitors in the last year, according to Failte Ireland. Despite this, it was still a great year for the industry with 69% of hotels and 63% of national attractions welcomed more visitors than in 2016

The minimum wage

We can see that from a salary perspective, there is not a huge difference on 2016 except for salaries at the lower end of the scale, up to €30,000. The general consensus within the industry is that the biggest challenge in 2018 will be to manage the increase in the minimum wage. The jump to €9.55 at the beginning of January has had a knock-on effect. In previous years, employers could allow for an extra 10c or 15c above the minimum wage to create more attractive packages. However this year, with a jump of .30c, this is not possible. We are seeing employers make the decision to raise the hourly pay rate to €10 per hour for entry-level positions. This is pushing up all the lower pay scales to a higher level making it very difficult for businesses in a candidate driven market.

Retention and reward

The next big obstacle for hospitality is to retain the staff that they already have in place through progression and reward. We can see that there are more and more internal promotions, allowing Owners and Managers to keep their core staff in key positions. While this may be a way of retaining staff without any immediate financial cost for the business, if not managed properly, it could lead to inexperienced staff holding senior positions, for which they are not yet ready. They also run the risk of staff getting frustrated at increased workloads and responsibility without feeling a financial benefit. Reward is a different approach that some key players within the hospitality industry are taking and it seems to be working quite well, rewarding staff financially for achieving milestones within the company, usually loyalty and length of service.

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