Mervyn Ellis
Director - Retail Transactions BNP Paribas Real Estate Ireland
+353 (0) 1 661 1233

As we are all well aware, 2020 is a year that will not be forgotten by anyone for many years. Day to day normalities are no longer, and we are being tested by an inability to do the things that we have previously taken for granted. From an economic point of view, one of the sectors that is facing the biggest challenge is the hospitality sector. Within this sector, there are quite a number of subsectors including hotels, pubs, restaurants, cafes, and leisure.  All of these are without exception severely impacted by the Covid-19 pandemic, with Dublin City Centre appearing to be taking one of the greatest hits.

As of July, hospitality venues that were able to serve a substantial meal were permitted to open to trade.  Capacity at any one table was limited both by number and household, spacing of tables was required and time restraints were placed on customers. While capacity was severely reduced, this permitted a significant amount, if not all, F&B venues to open. 

In the initial roadmap set out by the Government in late June, any bars that did not or could not sell food pre-Covid were unable to open until August.  While Pubs outside Dublin were finally permitted open in late September, the reopening of all Dublin venues was further postponed and it remains unclear when they will be permitted to reopen.

Up until 18th September, when Level 3 restrictions were introduced in Dublin, the hospitality sector was making the most of the situation. Operators were adapting in an effort to maximise turnover through initiatives such as adding any and as much external seating as possible, continuing a delivery / collection service and serving meals to go.  Reduced capacity has undoubtedly had a major impact on profitability but operators were open and trading and carrying on what they do best.  Reports suggest that their loyal customers have been just that, supporting them in these difficult times. The new restrictions changed this with only outdoor dining permitted and strict limits on the number of diners allowed on a premises at any one time.   

The suburban markets appear to be performing better than city centre locations, which is not surprising given that people are not travelling too far from their houses and the majority of the workforce in the state is still working from home where possible, thus encouraging us all to shop and dine within our own immediate locality. Of all the operators within the sector, those companies that are specialist delivery-based restaurants are seeing trade increase year on year, some by more than 10% which is an excellent result for them. The majority of the other operators are, by the very nature of the limitations imposed, endeavouring to break even and keep as many staff employed, which for some is the primary objective.

Dublin City Centre is facing the most serious issues. Offices are predominantly empty, colleges are predominantly operating online and there are no tourists. Shoppers are making their way into the prime retail streets of Grafton Street and Henry Street, but footfall is a fraction of pre-Covid levels.  All of this is seriously testing the resources of operators both financially and mentally. 
Temple Bar is one of the most impacted as it is so reliant on foreign visitors.  All of the traditional pubs in Temple Bar have not opened since March, which does have a massive knock on effect for nearby traders. Many pub operators in this area are indicating that they will not open until tourism returns, a timeline which is unknown. Other locations which are severely impacted are those where there is a large office population. Examples include the South Docks and IFSC where there has been a severe fall in turnover as employees continue to work from home by and large. Many cafes and restaurants in these locations have remained closed since March.

The introduction of Level 3 restrictions was a real hammer blow to the sector.  As operators were getting used to the new environment and preparing for what they were hoping to be a reasonable Christmas period, all things considered, Level 3 has compounded the difficulties. The lack of warning and an immediate implementation of the restrictions was a real disappointment for the sector, which led to a huge amount of food wastage, not to mention the numbers of workers that had to be let go.

The Budget this week appears to have been well received by the sector. The criteria for obtaining the maximum subsidy of €5,000 per week is a high bar and out of reach for many small businesses, and the detail is yet to be seen in the Finance Bill. But at a time when so many sectors are looking for so much, the measures announced will provide much needed assistance for those that most need it – venues that are effectively closed, either through an inability to provide takeaway or a lack of space capable of accommodating external seating, or both. This week has demonstrated to the sector that the relevant government departments are listening and taking on board as many of their concerns as possible.

Heading into winter and at a time when currently only outdoor seating is permitted, Dublin City Council and other local authorities, have also tried to play their part and assist venues in permitting more on-street dining.  More of this is needed and it is widely commented that it is a welcome addition to the environment of a town or city. The government departments are certainly encouraging the officials in the various councils to look favourably on any such proposals and any planning permissions that may be required for external seating should be seen as a priority and approved. Fire Steakhouse on Dawson Street is currently seeking permission for a covered terrace in front of its premises at the Mansion House specifically as a result of Covid. The permission being sought is for a period of two years and given that this building is owned by Dublin City Council, this will be an interesting case to follow to see the reaction from the landlord. 

There is no doubt that, even after the Government provides as much support as is practically possible, there will be huge change to the landscape over the next 12 months.  We have already seen a number of new openings since March, which highlights the entrepreneurial nature of those that operate therein. With almost 400 F&B outlets in the key city centre hospitality zones, 67% of which are operated by independent operators or small Irish companies, this unique mix of cafes, bars and restaurants is what makes the city what it is – an appealing place to visit and dine in. In order to maintain these attributes it is important that all stakeholders play their part in ensuring that the landscape does not alter too much, which would undo the great progress made in this sector over the last decade.

Mervyn Ellis
Director - Retail Transactions BNP Paribas Real Estate Ireland
+353 (0) 1 661 1233