Mr. Paul Clancy:

I thank the committee for the invitation to attend today's meeting. I am joined here by VFI president, Mr. Paul Moynihan. As CEO, I would like to outline the context of how our sector arrived at its current position. Even allowing for the impact of Covid-19, the tourism and hospitality sector is one of the key generators of employment in the country. There were 260,000 jobs in the sector pre-Covid, or 11% of all employment in the country. One of the critical aspects of this employment is that it is dispersed right across the country, and especially in parts where there is little alternative employment. Of the 260,000 jobs, two thirds or 175,000, are generated in regional and rural Ireland. Tourism has played a significant role in the revival of the overall economy since 2011. It is important to remember that our sector has created the highest number of new jobs in the past decade.

So, where are we now? The Covid pandemic was a game changer like no other. On 15 March 2020 our pubs closed for an initial two-week period, but ultimately, they would remain shut for almost two years. In that time many businesses were saved by Government interventions in the guise of the employment wage subsidy scheme, EWSS, and business interruption supports. The pandemic unemployment payment, PUP, was also vital to support the many bar staff who lost their jobs. Without these supports most pubs would have gone out of business, so it is important to place on the record the industry's appreciation of these interventions. As mentioned, many staff lost their jobs during Covid. Simply put, they could not wait around to find out when pubs would reopen. If members recall, there were multiple times during the Covid crisis when pubs were given a date for reopening only for it to be postponed at the last minute. This played havoc with people's lives and careers. They had to find alternative employment in other sectors. Consequently, it is no exaggeration to say that Covid has had a serious impact on labour supply for our members, with a knock-on effect in respect of skills shortages that is restricting the capability of many businesses to survive.

Pubs have had to adjust to the serious skills shortage in many ways, including through reduced trading hours; the provision of additional hours for existing staff and, in particular, owner-managers training new staff who are both young and inexperienced; total closure for a period to allow existing employees annual leave; and increasing wage rates to meet the expectations of existing employees. This is not sustainable if businesses are to remain viable. It also has the capacity to negatively impact customers' expectations of a hospitality setting. This has a major impact on the tourism offering. The lack of trained, experienced staff will impact the quality of service. As we begin to reboot our tourism business, this has the capacity to be a negative factor. The breadth of the offering will suffer. Many outlets have chosen, out of necessity, to close for two days in the early part of the week. In some geographical areas it remains challenging to get a booking for food on these nights.

On the actions required, the skills shortage will require a response on multiple fronts. From an industry perspective, work has to be undertaken to convince school leavers that a viable career path exists in the pub sector. With that in mind, the VFI has worked with State agencies including SOLAS and the National Apprenticeship Office, along with Griffith College, to develop a bar manager's degree apprenticeship - the first of its kind in Ireland. In fact, the first 24 students have already started the course and feedback is extremely positive. While there is a relatively modest student number initially, over time we intend that the degree will be available nationwide. These students will go on to hold senior well-paid positions within the trade, with a lifelong career available if they so choose.

From a Government and State agency standpoint, we need the following actions to be taken. The Government, through one of the dedicated agencies, needs to conduct an immediate labour market analysis to determine the precise scale of the current problem and the scale projected over the medium term of three to five years. These data need to be used to frame a full response. The work permit situation has caused huge frustration for our members. Access to more suitably trained staff must be prioritised. In in that regard, the COG working group on accessing European markets is so important. Given the context of the nature of employment in the pub sector, access to a visa-free labour pool is crucial. We welcome Fáilte Ireland’s new targeted marketing campaign designed to highlight the benefits of a career in the hospitality sector. We will continue to work with Fáilte Ireland to ensure such campaigns are of specific value to the pub sector.

In summary, tourism and hospitality was a vibrant sector that continued to contribute significantly to the economy and job creation. It has suffered a massive shock. The shock has led to a major challenge in attracting and retaining staff. Actions are required in the very short term to address this challenge. I thank members for their time and we are happy to address any questions they may have.