The restaurant industry in Ireland is grappling with a severe crisis as a result of recent changes in government wage policies. According to the Restaurants Association of Ireland (RAI), 71 restaurants shuttered their doors in February alone, leading to the loss of over 1,500 jobs. The RAI reports a staggering 280 closures in the latter half of last year, with projections indicating a further increase in costs by 456 million euros this year, and a daunting 1.4 billion euros by 2026.
The hike in the National Minimum Wage by 12.4% in January, coupled with additional expenses such as sick pay and parental leave, has compounded the challenges faced by the industry. These measures, while beneficial, are straining the profit margins of many small and medium-sized enterprises (SMEs) within the sector.
ITC CEO Ogan O’Mara Walsh highlighted the lack of government support for implementing these changes, emphasizing the necessity for assistance packages tailored to SMEs in the hospitality sector. Urgent action is needed to avert a complete collapse of the industry, which remains a vital component of Ireland’s economy.