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Joint Committee on Tourism, Culture, Arts, Sport and Media debate -
Wednesday, 25 May 2022

Working Conditions and Skills Shortages in Ireland’s Tourism and Hospitality Sector: Discussion

I welcome our guests at what is a really good time to have them here. Their sector has been very much in the media over recent weeks and their organisations, and more importantly their publicans, are getting their feet on the ground again after two and a half very difficult years, so we are looking forward to hearing from them on that.

We are joined by representatives from the Licensed Vintners Association, LVA, and the Vintners' Federation of Ireland, VFI. We are delighted to have them here and thank them for taking the time to meet us. On behalf of the committee, I warmly welcome Mr. Donall O'Keeffe, CEO of the LVA, who is joined by the newly appointed chairperson of the association, Ms Alison Kealy. She is very welcome and I congratulate her on her new post. I also welcome from the recently appointed chief executive officer of the VFI, Mr. Paul Clancy, whom I also congratulate, and Mr. Paul Moynihan, president.

I ask our witnesses to adhere to the time allocated for their opening statements in order that we will have as much time as possible for questions. As they will probably be aware, the committee may publish opening statements on its webpage following the meeting.

To limit the risk of spreading Covid-19, the service encourages all Members, visitors and witnesses to wear face masks in crowded settings on the campus.

Before I invite our witnesses to deliver their opening statements, I ask everyone to bear with me while I go through some housekeeping. Regarding parliamentary privilege and the practice of the Houses as regards references that may be made to other persons in evidence, the evidence of witnesses physically present or of those who give evidence from the within the parliamentary precincts is protected pursuant to both the Constitution and the statute of absolute privilege. Witnesses are reminded of the long-standing parliamentary practice that they should not criticise nor make charges against any person or entity by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging to the good name of that person or entity. If, therefore, their statements are potentially defamatory in respect of any identifiable person or entitty, they will be directed to discontinue their remarks.

Members are reminded of the long-standing parliamentary practice to the effect they should not make comment on, criticise nor make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable. I remind members of the constitutional requirement whereby Members must be physically present within the confines of Leinster House to participate in public meetings. I cannot permit someone who is not adhering to that constitutional requirement to contribute.

I ask members participating by MS Teams to identify themselves for the benefit of the Debates Office staff preparing the Official Report and to please mute their microphones when they are not contributing to reduce background noise. I remind everyone also to switch off their mobile phones or to put them on airplane mode.

I invite Mr. O'Keeffe to make his opening statement.

Mr. Donall O'Keeffe

We thank the Chairman and members for the opportunity to appear before the committee regarding what is now the single most important challenge for the Dublin licensed trade. We are represented by our chairperson, Ms Alison Kealy, who is just three weeks into her tenure, and me as CEO. We acknowledge the committee and the Government for their support for the hospitality sector throughout the pandemic. Without that financial support, we simply could not have survived. We very much welcome the recent Government decision to extend the 9% VAT rate to February 2023. This is a really significant support as we rebuild our industry.

It is widely accepted that the hospitality sector, and pubs in particular, was among the sectors hardest hit by Covid. One of the direct impacts has been the considerable loss of staff, whether through international staff returning home or staff leaving the licensed trade to work in other sectors, such as retail, distribution or construction. Two years of closures and restrictions has had a devastating impact on staff retention in our sector.

Some 79% of our members reported that uncertainty about the future of the pub trade was the main reason for losing staff. In all, we estimate that about one third of our staff have departed the sector. Given the shortages of skilled staff that existed pre-Covid, the loss of chefs, managers and senior bar staff from our sector during Covid has made a difficult situation all the more challenging. While we are encouraged by the level of business since we reopened, it is fair to say that staff availability is now the biggest inhibiting factor to full recovery.

We have provided the committee with a comprehensive submission setting out our views in full. Based on our own member survey, some of the key business impacts of the shortage of staff include a reduced number of trading hours - due to later opening - and trading days. Some 88% of members reported staff recruitment as a serious difficulty, while 89% of members worried about staff shortages in 2022. The particular skills gaps that we identified are around general management, operations, customer care and event management. In terms of attracting staff to work in the sector, we must focus on what workers themselves see as the key reasons to work in hospitality. The Fáilte Ireland research found these to be a passion for a particular skilled job, with 66% of chefs noting this; a passion for working with people, which is the core of hospitality; seeing it as a long-term career, as mentioned by 71% of respondents; flexible hours, particularly for women; and generally enjoying the working environment. To this end, we are encouraged by the launch of the Fáilte Ireland tourism careers marketing campaign but feel it should be widened to expressly include hospitality as well as tourism. For its part, the LVA supports its members through the provision of a full-time HR advisory service run by a highly experienced HR professional; the LVA-designed diploma in bar and food management, which provides 60 hours of training; the running of seminars, workshops and conferences; and the provision of an employee assistance programme for staff. Looking ahead, in an economy nearing full employment, we believe the following policy developments are required to address the skills shortages in our sector.

We are calling on the Government and State agencies to complete a review of the efficacy of the work permit scheme to boost skills and supply staff more efficiently, as we do not believe it is fit for purpose for hospitality currently. The process itself and processing times are very inefficient. We are calling for a clear designation and establishment of a hospitality training division within an existing State agency, potentially Fáilte Ireland, and the elimination of current silos across Departments and State agencies with regard to hospitality. We ask what Department and which State agency is responsible for hospitality. The short-term immediate priorities of the tourism and hospitality careers oversight group, COG, make a lot of sense to us but the group's longer-term strategy must be finalised this year. Critically, its policy recommendations must be funded for the medium-term supply of skills. An independent chair with an appropriate budget would facilitate that. In the longer term, sustained Fáilte Ireland investment in marketing of hospitality and tourism careers is also required. The hospitality sector itself also has a role to play. We must build and market career benefits, invest in the training and development of staff, improve conditions over time, and highlight the flexibility available. We all know that good employers will always attract the best talent.

In conclusion, the shortage of hospitality staff and management skills is the biggest barrier to the rebuilding of the pub sector. A longer-term State strategy for hospitality skills, which is adequately resourced and funded, is now imperative. I thank the committee for the opportunity to present our views. We welcome any questions members may have.

I thank Mr. O'Keeffe for his insightful and comprehensive presentation. I have no doubt but that my colleagues will have many questions. Before we start the question-and-answer session, I invite Mr. Paul Clancy from the VFI to make his presentation.

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.

I thank Mr. Clancy and appreciate his presentation. I am sure it will initiate many questions from my colleagues and members of the committee. The meeting is focusing on working conditions and the skills shortage, which have been addressed by the witnesses. I will now open the questioning from members, who have the speaking order in front of them, so they know where they are. I ask members to keep to the five-minute time limit for questions and answers. We will begin with Deputy Christopher O'Sullivan.

I will get straight into it. My first question is for the representatives of both the LVA and VFI. It was not addressed in the presentations, but to what extent is a lack of accommodation a barrier to attracting staff? I have heard stories of pubs, restaurants and hotels that have identified skilled staff who want to come to an area and work there but accommodation is simply not available for staff. I ask the witnesses to respond.

Mr. Donall O'Keeffe

It is a serious issue. I think the situation is most extreme in Dublin, given the shortage of accommodation and the cost of rental accommodation.

It is difficult to attract back international staff who left during the Covid pandemic to Dublin when they look at the cost of living in Dublin in 2022. That is a serious issue for us.

Mr. Paul Moynihan

Places across the country, including Cork, Limerick and Galway, are all experiencing the same issues with accommodation. It is not so much an issue in rural Ireland. I often hear that if places want to attract foreign staff back, they need to have accommodation for them, which is an issue for many publicans and businesses.

Have members put forward potential solutions to that problem?

Mr. Donall O'Keeffe

We are in the pub trade, not the accommodation business. Individual publicans around Dublin are providing accommodation but they are the exception, not the norm. We have members who are acting as guarantors for rents and deposits for landlords. One issue we are struggling with on a practical level, which Ms Kealy will be able to give evidence of, is that international staff tend to return in smaller groups or in ones and twos. Putting a group together to rent a house is difficult when the landlord wants to deal with one person responsible for the four- or five-bedroom house. Accommodation for one person in a one-room flat is too expensive for hospitality staff. It is a significant barrier to returning international staff. It is also an issue for people from the country who move to Dublin to work in the hospitality sector. They face the exact same problem. The shortage of accommodation is a national issue and the Government's Housing for All strategy is needed.

I have two and a half minutes left so I will lump my questions in together. The witnesses might note them and answer where possible. This one is mainly for the VFI. During the week, many regional towns with students attending college seem to have an issue. The weekend is not as problematic because students are looking for work. Is that an issue and how can it be solved?

This question is for both groups. It appears that drink sales are down since before the pandemic. Do the witnesses see that ever bouncing back to pre-pandemic levels or has there been a cultural shift? Are they fearful it might not come back? We have all noticed that people do not seem to be going to pubs as much as when I was in my 20s. Is there a longer-term cultural issue?

The witnesses mentioned security of employment and the fact that people are fearful about the future. They also covered the visa waiver and visas for non-EU workers.

My final question is for the VFI. This is a good opportunity to raise it. Many of us have been contacted by local VFI members about the proposed sale of alcohol Bill. Some aspects of it are concerning for the VFI in particular, such as the extinguishment issue. There is much more detail in the Bill to be hashed out but the VFI's members might be fearful that, while the existing set-up is that a new licence is only granted where another licence is extinguished, there might be a free-for-all. I would certainly be concerned if that was the case. The witnesses might address that.

Mr. Paul Clancy

There was a question about footfall during the week, particularly in towns with students. We have found, after Covid, that the hospitality and pub trade is focused on events. Publicans have to work much harder to get the footfall during the week than they do at the weekends, when there is a lot of natural footfall from students. They are working much harder to try to attract people into businesses to increase footfall, when it may have happened naturally in the past.

Mr. Paul Moynihan

Some 95% of the VFI's membership are back to trading. Some 93% of pubs around the country have reopened. That is positive. There are issues in certain areas affected by the pandemic. Some publicans have decided not to reopen and there may be family issues. The current status of the trade is positive for most publicans. We are happy with where we are going. There are issues in some cities where offices are not full yet, but generally speaking, around the country, we are confident about where we are and where we are going in the future. It has bounced back well.

Mr. Paul Clancy

We are quite positive about the rest of the year but there is a concern about next year, any potential recession, disposable income and so on. We are very busy at the moment. We got a natural bounce-back. To answer the question about pubs, since people could not go there during Covid, there has been a large return migration to them because people have enjoyed them being open and being social again. There has been a natural bounce in the business because of that.

Will the witnesses comment on the proposed sale of alcohol Bill?

Mr. Paul Moynihan

Our concern is that there will be a free-for-all to open anywhere around the country that may suit people. Alcohol is a drug and we need it to be sold responsibly. We have to look after ourselves and to run orderly houses. We have to get our licence every year. We have to work with a fire officer. We are fearful that if licences are diluted, it would be so easy to open licensed premises that every corner shop might be able to put something up in a corner and start selling draught beer. It is a big issue and I do not think society really needs it. What we have at the moment works well. Why change it?

Mr. Donall O'Keeffe

I will comment on long-term drink consumption trends and what we have experienced. I will try to answer in two ways. The Deputy is right. Alcohol consumption has declined steadily each year over 20 years, from a peak of about 14 l of pure alcohol per person to 10 l per person today, which is in line with the EU average. In Ireland, there has been a substantial shift from the on-trade to the off-trade. Between 15 and 17 years ago, 80% of alcohol was consumed in pubs and 20% was from off-licences. That has flipped on its head and today 65% is probably in off-trade and 35% to 40% is in on-trade. There has been a huge shift over two generations.

Ms Kealy would be better able to explain this from an operator's perspective. Since we reopened, we have seen people come back to the pubs in droves. We are really encouraged by the number of young people who are coming back. Our sales are running between 90% and 110% of 2019 levels if we compare each week. The city centre is slightly weaker than suburbia because offices are not fully repopulated and tourism is only getting going. Recovery is positive. We can see it strengthening and getting going. We are pleased with the demand levels we have experienced since we reopened. One silver lining of the pandemic is that people realised that ordinary, normal social interaction and social occasions is something we missed when we were forced to stay at home. People are socialising a little better or a little more. Pubs in suburbia are busier in the middle of the week than they were before the pandemic. Food is a huge driver of our business and is more significant than drink in the early part of the week. We are optimistic in the medium term that Dublin will trade strongly. The economic clouds are on the horizon for everyone but the near-term outlook is positive.

We are equally concerned by the sale of alcohol Bill. The licensing regime does not exist to protect publicans from competition. It exists for regulatory control reasons, to allow the Garda, public health authorities and Revenue to manage the sale of alcohol. We believe we have a world-class pub culture in Ireland. The regulatory regime is a big part of that because it puts a huge onus on licensees to run their pubs in a responsible manner. The fact that licensees have to go to court every September to renew their licence is integral to having a solid licensing regime. We note the long-term trends, with pub numbers having declined 21% since 2005. We believe there are more than enough pubs in the country. There are twice as many pubs per capita in the Republic of Ireland as there are in the UK, even though the UK is fully deregulated. We have a substantial number of pubs, at 6,800. We have 14,500 alcohol businesses in total, including pubs, restaurants, hotels, off-licences and on the supply side.

We are densely served in terms of outlets that sell alcohol. We think that it is critical that the extinguishing requirement is maintained because it provides regulatory control. We live in a world, both in Dublin and nationally, where there is huge competition between pubs, and between pubs, restaurants and hotels, which is in the interest of consumers. Given that we have, in our opinion, a strong pub culture, we believe the Government needs to be extraordinarily careful about licensing reform in terms of the number of licences.

I welcome the delegations from the LVA and the VFI. I thank them for their efforts and their opening statements on the issue of skills shortages in the tourism and hospitality sector.

My first questions concern ways to attract international workers to Ireland as part of the solution to the skills shortage. What type of multifaceted approach is used to recruit local and international talent? What measures have the members of both organisations taken and are taking in that regard?

Mr. Paul Clancy

From a local perspective, we are looking at the live register and we are trying to encourage people. The Deputy might have seen the Fáilte Ireland presentation, which is currently on various media platforms, and that seeks to attract people into the industry and make it attractive for them to join. The presentation focuses on the flexible side of working in hospitality rather than on the negative side of, say, the late hours, and considering different age groups, and older age groups, that may be more interested in joining the hospitality sector.

From an international perspective, we work with EURES, the European Employment Services Network, as well as with COG and Fáilte Ireland with a view to arranging conferences in, possibly, Spain, Italy and Greece that have a high youth unemployment rate and encourage people to come to Ireland. As an organisation, we are actively working on that with COG and Fáilte Ireland to encourage those initiatives. We also work with our stakeholders in the industry such as the Restaurants Association of Ireland to get these initiatives going and create an awareness that there are opportunities here. I hope that we will get some traction on all that. We are looking both locally and internationally, while trying to make the whole industry attractive. The spin that Fáilte Ireland is doing will have a good impact on raising awareness that the hospitality sector can be a great place to work from a life perspective, and if we can do that then, hopefully, we will attract more people to work in the industry but it is a challenge at the moment for sure.

Mr. Donall O'Keeffe

Our international efforts are focused on our participation in COG. Ms Gillian Knight, who is the LVA's HR professional, is a member of two of the working groups. As the Deputy is aware, the LVA is involved in the working group that supports the industry to access staff from European markets because it is around the selection of which market has the best potential, which involves looking at the labour markets in those countries. The LVA is also involved in the working group that supports Ukrainian people in Ireland who wish to work in the hospitality sector, and we are working with Fáilte Ireland and COG to identify the barriers in that instance. That is where our primary focus lies in terms of international staff.

For non-EU staff, and I think this point has been made by everybody in the hospitality sector, the visa process needs to be re-examined. For example, there is a requirement to have a job advertised for four weeks. To then get an applicant and then process the visa is not a practical response for a business that needs a chef or senior manager this week or month.

I have raised concerns about the approval of visas and the issuing of a personal public service number, PPSN. The delay is a cause of huge concern.

Mr. Paul Clancy

We are definitely working hard on that to improve the pace of the visa application process and I have specifically focused on chefs in terms of reducing the administration time. I think that may sort next year but not this session.

On incentivising international workers to come here, have the organisations considered providing relocation supports, English language lessons, mentoring and training courses to change the mindset of both local and international workers to ensure they know there is a good career path and to convey that it is tailor-made? As previously mentioned, consideration is being given to providing a programme to students, such as transition year students, that conveys that a career in the industry can be enjoyable, has a future, that there is progression through management levels and there is good reward and recognition for a job well done.

Mr. Paul Clancy

I have mentioned that people now have the option to select a degree apprenticeship on the CAO form. Also, parents are realising that this a career alternative for their children. Allied with Fáilte Ireland's support, we certainly can do more and we will do more. We are making as much an effort as we possibly can in the short term to attract people to the industry.

Ms Alison Kealy

We are actively recruiting foreign workers for day-to-day operations. We are recruiting workers from the UK and some workers will come from Romania too. Accommodation is a huge issue. We are having to support applicants and help them to source accommodation before they will even agree to come over here. That is the reality in Dublin at the moment.

I am sure that it is a lot more difficult in the pub industry compared with hoteliers who have accommodation available.

Ms Alison Kealy


I thank the witnesses. I congratulate Mr. Clancy on taking up his new role and I also thank Mr. Padraig Cribben, as outgoing chief executive. Mr. Cribben has been before this committee and members will have encountered him as a very effective lobbyist over a long number of years. I congratulate Mr. Clancy and Ms Kealy on their election.

I did bar work as a means to fund my way through college. I learned the trade in The Orphan Girl Bar and Grill, Ballymoney, Gorey, County Wexford, and the life skills that I acquired there have proven very useful in my political life.

Mr. Moynihan and Ms Kealy both run family-run pubs. I know about the difficulties to recruit staff as publicans near my home have told me their personal experiences and how hard it is to find good staff. Can Mr. Moynihan and Ms Kealy outline the difficulties they have encountered when trying to recruit good staff?

Ms Alison Kealy

The reality is that it takes an awful lot of time because you must dedicate three or four days a week to recruitment. We have advertisements on all of the websites etc. and have put up signs all around the place. You are constantly talking to people in an effort to encourage them to work in the industry. The minute you get a curriculum vitae from a good applicant, you ring that person and organise to meet with him or her but at the same time, you are scheduling yourself against many other places because the applicant will have five or six interviews lined up for that week. So we must really sell ourselves to the applicants to get them to come in because there is a huge demand for employees in all sectors. Once we get people in, then they find that they like working in the sector because, as has been said, the environment is social and has a fun atmosphere. Employers must be more flexible as well, in that if an applicant tells us the hours he or she is available, then we will fit that into our schedule to encourage as many people as possible to work in the industry. In my pub, through the LVA, we have put seven of our staff members through the course so there is career progression.

Obviously Mr. Moynihan has a very good family business in County Wicklow.

Mr. Paul Moynihan

Yes, and I will reiterate what was said by Ms Kealy. A lack of staff affects towns and villages all over the country, not just urban centres. I know owner-operators who are crying out for staff. They must close their businesses on Mondays and Tuesdays not because there is no business but because they cannot get staff and as owner-operators they cannot do the work of, say, three people and can only do what they can. Earlier we also said that pubs must close down for a week in order give their staff a holiday.

During the pandemic, we were the longest-closed industry. There was a stop-start approach and the industry was supposed to open a few times but that did not happen. From a parent's perspective and looking at one's children entering the family business, they had to consider whether a pub can provide a future career for their children.

It is important for us to try to change that mentality. We have been back open for a period of time where people can now see it is vibrant again and there is a future in our trade. Both organisations, VFI and LVA, are trying to put apprenticeship and management courses forward to show parents there is a pathway to betterment in our business.

The Senator mentioned there is nothing better for a student than to work behind a bar or in a hotel or something like that to get the life skills that will bring them to amazing places, such as where the Senator has got to. It very much stands to people. I have son who was born and reared in a pub. I was born and reared in a pub. We are so sociable. We can talk. We have a head full of talk all the time. It will get a person a long way.

We are confident going forward but, as I said, the problems are now. This may all sort itself out in a year or two. However, this summer there will be many tourists coming in, while pubs throughout the country will be closed on Mondays and Tuesdays. That is not we want our tourists to see. I think tourism in 2019 was worth €9 billion to the economy. This year, we have to be very positive. Tourists have to have the experience of the Irish pub. They all come to see it. It has to be open, and it has to have efficient staff.

To follow on from the cursory questions around the licensing laws, I am conscious of our plan to develop the night-time economy further. We are obviously going to be talking about later openings. With later openings there will be staffing requirements. I do not know what Mr. O’Keeffe’s perspective is. I get all of the other points around the sale of alcohol, but obviously this is something we are looking at, particularly in the major urban centres.

Mr. Donall O'Keeffe

We are keen on late trading. Our position, which we submitted to the licensing reform consultation, is that there should two forms of late trading licences. These would be a late bar licence, which would allow opening until 2.30 a.m., which is in line with the current late trading hours, and a nightclub licence, which would allow opening until 5 a.m.

The important thing to understand about the nightclub licence is that it will be for a very small niche of the industry. The vast majority of the industry in Dublin and nationally are happy with the current hours for the weekends. Most of my members have no ambition to go beyond the traditional hours. The guys who are running late bars are, broadly speaking, happy with the 2.30 a.m. closing on Friday and Saturday night. However, there is a cohort of large businesses in the middle of our capital city that does see a market and an opportunity for later. We attract many international tourists. We have a big, local young population who are keen to go out late on Friday and Saturday night, in particular. However, this will be a small niche of the industry. I would be shocked if there were more than 25 of those business in Dublin if the licences were granted. They will tend to be large businesses and they will tend to be city centre businesses.

Would they be able to staff them, given the current situation?

Mr. Donall O'Keeffe

The short answer is they will have to. These guys are specialists in the late-night economy. They tend to attract those staff who are interested in that. Currently, late bars are generally staffed with younger people who love the buzz, the energy and the vibrancy of a bar that is moving well late at night. It will be a huge challenge to get to 5 a.m., which is a significantly later extension than we have currently seen. However, I know those publicans who are interested in that late space have the ambition to do it, so they will make it happen. That is what they are good at. It is a huge challenge.

The other point I would make about the really late trading is there will be a ferocious challenge around insurance. Late trading insurance for regular late bars, which close at 2.30 a.m., is ferocious. I have a big cohort of members who are insured for 2.30 a.m. trading, who are spending between €80,000 and €140,000 per year on public liability insurance. That is more than €2,000 per week. If the trade goes later, that will get more expensive. Therefore, insurance is a real issue, as are the costs of staff and the availability of staff.

The witnesses are all very welcome. I concur with the best wishes to both Mr. Clancy and Ms Kealy in their roles. I thank their predecessors who represented the organisations over difficult times. During the week, Adrian Cummins made the point in a tweet that 150,000 people on the live register, and we have an industry that is struggling to get people working. We met with the Restaurants Association of Ireland, the Irish Hotels Federation and Fáilte Ireland a number of weeks ago to speak about this same issue. I say “Well done” to the VFI for its project with Griffith College, which I think could be expanded. I asked about it at the time and is something I am working on myself. We need a centre within the CAO, ETB and colleges of further education system dedicated to tourism and hospitality. It is an industry where more than a quarter of a million people are needed to service our tourism and hospitality. I have always put the two together. It is important, as I have said here before, that people representing hospitality are on the board of Fáilte Ireland, because they are needed.

I had a meeting in my own county of Longford with representatives of the VFI, including the chair, to whom I spoke, and the vice chairperson, and of the Restaurants Association of Ireland, the ETB etc. about looking at doing what I mentioned in the midlands to service the country. It would concentrate and specialise in particular on the catering end of things. At the minute, Tralee and Cork are the only places in the country where a person can do certain types of chef training courses. The reality is somebody from Donegal will not travel to Cork.

The people who are now running the most successful restaurants in the country went to the likes of Killybegs, Cathal Brugha Street and CERT. All of those are gone, so there is a huge opening, not just for catering but for the entire tourism and hospitality industry, to link in with the colleges of further education and the CAO system to put something together. When we put the emphasis on that, people will then see there is a career for them and it will get people into that. I look forward to working with both Ms Kealy and Mr. Clancy on that, because I believe it can happen and I want to make it happen.

The minimum unit pricing of alcohol under the Public Health (Alcohol) Act, which was mentioned, is something of which I was supportive, and I spoke to the VFI in my area about it. What are the witnesses' experiences of its effects since it has come in? Has it been positive to the trade and businesses? The witnesses quoted figures that indicate the market is changing. What benefit do the witnesses believe that that has brought to the pub industry?

Mr. Donall O'Keeffe

To be explicitly clear, we fully supported the introduction of minimum unit pricing and believed it should have happened years ago. The abolition of the groceries order as far as it concerned alcohol was a very bad move at the time and we said so. Multiple retailers have used alcohol as a loss leader and to drive volume sales.

The introduction of minimum unit pricing is a very important step. There are two things to say about our response so far. It only got going this year and we only got going at the end of January. We opened fully on 22 January. The initiative is strategically important in the sense it puts a floor on alcohol pricing. Looking at broad comparisons of the retail price of alcohol in Ireland and in the UK last summer, for example, the scope for our prices to continue to decline was very real. We believe the impact of a floor is therefore very important. The minimum unit price level could be a little higher, but it is very important that policy initiative was taken and we believe it is in the long-term interests of the country, not just the industry.

Mr. Paul Clancy

We would support that as well. We can see from the advertising by the large multiples there has been less focus on alcohol as being the central part of their initiatives to encourage people into their premises. If you take 24 cans, Prior to this, they would have advertised 24 cans for €25. Now, 15 cans are €25, so there is less. They are repackaging them and people are getting less alcohol for the same price.

It is difficult to tell at this stage if footfall has been driven to the on-trade because of the minimum unit pricing. That is difficult to establish that as of yet. However, we would like to think it would encourage people to come into the pub and to drink in the pub. From a community perspective, it is better to drink in there in a controlled environment than drinking at home. We believe it is a positive thing.

There have been various proposals and we have spoken about people coming in from abroad to work in the industry. However, we do not have housing for them, and that will be a problem. Given there are 150,000 on the live register, what proposals, if any, do the witnesses have or what sort of scheme could be put together to incentivise people to come into the industry to work and to come off the live register?

Mr. Donall O'Keeffe

As we said in our opening statement, we believe Fáilte Ireland's marketing campaign to attract people to tourism is very positive and welcome.

We believe it should be expanded to hospitality. If one listens to the radio at present, it is naturally and understandably tourism focused. One would not make the connection from the advertisement to working in pubs. We believe it has to be expanded to market hospitality as well as tourism because they are very complementary and completely interlinked but they are still a little separate.

For us, a State agency being responsible for training for hospitality and, as part of that, marketing careers in hospitality is probably the best way to go. We believe, and the pandemic exposed it, that hospitality falls between Fáilte Ireland, SOLAS, further education, enterprise, finance and tourism. We spent a lot of time, pre-Covid-19, seeking a response when we had issues being moved between the Departments in terms of who is responsible. Hospitality needs a mother Department that takes responsibility for training and development for the sector. As we said in our opening statement, there are real issues this summer, but there are also real long-term issues. Please God we will be in a full employment economy over the medium term. The country has emerged from the pandemic in strong economic condition and we see every sector, not just ours, screaming for staff. Construction is very lightly staffed, hospitality is very lightly staffed and retailers are looking for staff. Building skills capability for hospitality is the way forward in the long term, and that is something that takes time and effort. It has to be State-led because, with the best will in the world, trade bodies or representative bodies do not have the capacity to develop national training programmes. For it to be State-led some entity has to be charged with leading it.

I have said previously that tourism and hospitality are interlinked and they have to come under the Department of Tourism, Culture, Arts, Sport and Media. It must be linked in with tourism, with proper representation on the board of Fáilte Ireland.

Mr. Paul Clancy

I support the point about having a focus on training and development. We had 105 applications. We have 24 on the course. We are planning to roll that out into Dublin with Griffith College and into Cork and perhaps elsewhere. There is an attractiveness to the course. We have had great feedback so far from the 24 students on it. There is a pent-up demand, more than many people think there is, and a desire to work in the industry, so I fully support what the Senator is suggesting. That would make a great deal of sense. We were pleasantly surprised by the level of response we got; we were amazed by it. It is hoped there will be another cohort coming in September. It is a three-year programme and we hope it will continue and grow stronger.

Thank you. It is my turn now. To extrapolate from what was said in the presentations today, Mr. O'Keeffe, you answered the question I wanted to ask in your statement. You referred to the elimination of current silos across Departments and State agencies with regard to hospitality. You are saying there are so many aspects to it that it has fallen between many stools, and you want to see the training, recruitment, advertising and all aspects of it coming under the Department of Tourism, Culture, Arts, Sport and Media.

Mr. Donall O'Keeffe

We believe hospitality and tourism fit together. It makes sense to us that the Department and Fáilte Ireland would be natural homes for hospitality. Currently, Fáilte Ireland has a clear remit regarding tourism, but not hospitality. As it stands, hospitality probably sits in the Department of Enterprise, Trade and Employment, but under its SME business and perhaps even microbusiness for many of them because of the small number of staff. Given the scale of the industry nationally, given that it employed 250,000 people pre-Covid-19, and we hope to rebuild to that, and given that it is in every parish, town, city and county in the country, there appears to be an overwhelming case for a single Government entity to take responsibility for hospitality. As we have had such a traumatic pandemic, the challenge of rebuilding the attractiveness of the sector is going to be a multi-year and, ideally, State-led initiative.

That is coming to a point I was thinking of while you were speaking. For my generation, and I worked in a pub as a student when I was going to college, the pub was one of those part-time jobs. One did not think about it as a long-term career unless one grew up with the business or it was a family business, as Mr. Moynihan mentioned. It is great to see that shift and that now there is a degree available for students who want to pursue it because it is a very exciting, fun and energetic type of career. I gather that there has been a difficulty in putting a degree course in place, in the sense that you are dealing with SOLAS, the further education sector and so forth. Perhaps you wish to speak to that a little more.

Mr. Clancy said: "These students will go on to hold senior well-paid positions within the trade, with a lifelong career available if they so choose." Can you give us an idea of what type of salary somebody who completes the degree can expect to start on? Perhaps you cannot answer that question but I would like to know if it is possible to do so.

I refer to Mr. O'Keeffe's presentation. You talked about where the gaps are - general management, operations, customer care and event management. There are many courses in event management now. When you spoke about them I thought to myself that they are key pieces in the entire industry. If that is where the gaps are, there is a real danger that the scaffolding will come down around the structures there are in place if those key oversight people are not in the positions you mentioned. Event management could be something in the arts or music and might not necessarily be driven towards your industry-----

Mr. Donall O'Keeffe

That is correct.

-----although I realise it has to be much broader than that. Where do you get your operations, general management and customer care people with the required skills set unless it is something they have been in already and have come up the ranks? I am guessing that if they are not there, you have lost them already.

Mr. Donall O'Keeffe

You are 100% right, Chairman. One of the things that happened to us during the pandemic is we lost many senior, experienced, skilled staff who could not wait for the sector to reopen. We were closed too long. They had family and mortgage commitments. They discovered that, due to the training they had and the experience they gained in our sector, they were highly employable. They found jobs in retail, distribution and construction management very quickly and just moved on because they had to. We have lost a massive level of experience.

On the question about training requirements and how to develop them, we have been running a diploma since 2017. What we have learned in those five years, and as we knew at the start, is that it must be tailored specifically to the licensed trade environment. Running an event in a pub is very different from running an event in a convention centre.

Mr. Donall O'Keeffe

The skills required to manage customer service, manage staff, manage suppliers, schedule events and to staff up or staff down are gained mostly through experience rather than from formal learning, but we found with the diploma that it gives people a structure to think about how it should work in the licensed trade. The other thing we learned, which is massively encouraging, is that many of the students who went through our diploma are now in senior management roles in large pubs or pub groups or are out working for themselves, where they have taken leases on pubs and are trying to build their own business. What we find with students who have high levels of energy and enthusiasm is that their ultimate goal is to establish their own business and work for themselves.

One of the really important things about training provision, and the reason we believe there has to be a dedicated hospitality body for it, is that it has to be designed for the specific environment of the licensed trade. It is not a nine-to-five job. It is late at night and over the weekends, dealing with large numbers of customers and staff and all that goes with that. However, one of the things we are encouraged by post the pandemic is that, like with the VFI apprenticeship course, the demand for our course is overwhelming. Our September course is virtually sold out without advertising it at all. The business now realises that we must invest in our staff given the brain drain we endured through Covid-19. There will be huge opportunities in large commercial pubs throughout the country over the next five to seven years for ambitious staff. Part of the challenge for us and the Government is to highlight that.

Mr. Clancy spoke about the apprenticeship piece and Griffith College. If that was being rolled out in further education around the country, there probably would be uptake for it. There is a generation of young people now who feel, and rightly so, that they do not just want to grow up in a business. They want to be given the skills set even if the family business is to be handed on to them. They want the opportunity to have that skills set come from an objective point of view, not just from how their mother or father taught them how to do things.

Mr. Paul Clancy

That is right. It is to give them that set of skills so they can run a business, make it profitable and grow it. They need a skill set to be able to do that in an efficient way. If you identify somebody behind the bar who is showing he or she has aptitude, you want to retain such people and staff retention is another big issue. On this degree course, the publican is investing in the individual. There is a grant available but the publican has to dig deep and support the individual. There is a mentor programme going on within the pub as well, so it is a win-win for both. As the student goes away, he or she comes back with new ideas and can help the publican to implement those ideas. It is an excellent initiative and it shows there is a different career path to success. Somebody might start behind the bar and take up a lease or have their own bar in the future. They might also take it over from their parents but it gives them the confidence, knowledge and skills to be able to develop their business and make it a success.

The witnesses have alluded to Fáilte Ireland's campaign on it being an attractive industry to work in. Do we have any measure of the output from that?

Mr. Donall O'Keeffe

It is far too soon.

Mr. Paul Clancy

It is a bit early yet.

Mr. Donall O'Keeffe

It only started last week or ten days ago. It is just too early yet.

There will be analysis done I am sure.

Mr. Donall O'Keeffe

There will of course.

Mr. Paul Clancy

It is excellent because no matter when you switch on the radio, it is there and it has three different types of individuals. It is raising awareness that this is another alternative that can be opted for. It is appealing to parents and career guidance teachers as something their sons and daughters might be interested in.

What kind of salary can someone who goes down that career path, does that degree and comes out expect starting out?

Mr. Paul Clancy

It is a good question because we have not had any cohort come out yet. My answer is that it would be commensurate to the role and responsibility involved. I am sorry I am not able to give a figure on it but at the end of the day, they are coming out with a degree and they will have that. There is a potential for future income and a development opportunity for the individual. If they want to travel, that qualification is recognised worldwide, as is our hospitality sector. This piece of paper adds credence to their qualifications and if they go away they have a better chance of getting a better paid job in some other country. It helps their job transferability across the world.

I can see Senator Malcolm Byrne shaking his finger at me so he wants to get back in.

A lot of those initiatives are welcome but they will be medium to long-term solutions. Part of our concern has to be this summer, particularly for the tourism product. We all know there are few pubs saying they have plenty of staff; everyone is struggling. There are things the industry can do and in our next session we will be talking with the assistant secretary of the Department. Are there measures the Government can take in the short term that will assist? We must bear in mind that nearly every sector is coming in saying it has skill shortages. Are there economic or other measures that will help to address the problems this summer, particularly in tourism? There are cost of living concerns but there are also concerns if somebody has a poor experience and is waiting for ages at the bar or before being served at a table. Is there something specific that the Government can do?

Mr. Donall O'Keeffe

To my mind it is about funding the recommendations that come out of the COG working group on short-term measures. The COG is looking at six different things, including: the integration of Ukrainians who want to work in hospitality; the international recruitment of staff in Europe into the Irish market; and building future skills. The challenge for the COG process, which is the right process, is that somebody has to be made accountable for the delivery of the recommendations. I am sure the group, which is due to finish its work in the coming weeks, will come up with sensible recommendations on how to drive this forward. Then it becomes a matter of who is responsible for doing that and who is funding it. We must also bear in mind that the COG is working across Fáilte Ireland; SOLAS; Enterprise Ireland; education and training boards; the expert group on future skills needs; the Departments of Enterprise, Trade and Employment, Social Protection and Tourism, Culture, Arts, Gaeltacht, Sport and Media; and higher education colleges. Somebody has to take responsibility for those outputs to make them happen. One of the things we would ask of this committee is to ensure that is resourced to be delivered and that it does not just become a set of recommendations of things that must happen before we all wonder why it did not happen.

Will that mean that if I go into a bar this summer, I will not be hanging around waiting for long periods? I know Mr. O'Keeffe cannot give a guarantee on that but he gets my point.

Mr. Donall O'Keeffe

Believe you me, the urgency to increase the staff numbers is felt by us in a big way. Those kinds of measures around international recruitment this summer and the Ukrainian people who want to work in hospitality this summer are immediate tasks to be developed.

It is not just the bar industry, hospitality, hotels and retail but the biggest issue facing anybody is recruitment and retention.

Mr. Donall O'Keeffe

We tried to make it explicit in our opening statement that we are feeling huge pressure this summer. This is a long-term issue that will be with us for the next three to five years in an economy that is at virtually full employment. We are in an economy where we will be competing with construction, retail and hospitality, which are all labour-intensive jobs. Ultimately, the elements of the service industry all need huge numbers of staff. While summer 2022 is hugely important, the bigger challenge is to develop a programme this summer that helps us to work our way through this in 2023, 2024 and 2025. It would be disappointing if we were sitting here facing the summer season next year in an identical position. That longer-term strategic approach is critical because this issue will be with us for the medium term.

Then we go back to Senator Carrigy's point about so many people being on the live register and how we try to address that. I thank Ms Kealy, Mr. O'Keeffe, Mr. Clancy and Mr. Moynihan for coming in. We appreciate it and we wish them luck in the times ahead. We appreciate that they are facing into difficult times. We will try to action the suggestions and recommendations the witnesses have made today with our committee. I thank them for their presentations.

I will suspend our meeting to allow the witnesses to leave and for our next meeting to take place, which is with the secretariat of the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media.

Sitting suspended at 2.37 p.m. and resumed at 3.05 p.m.

I am delighted to welcome the officials from the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media to continue the discussion on the working conditions and skills shortages in the hospitality sector. I welcome Mr. Cian Ó Lionáin, assistant secretary with responsibility for tourism and sport, and Mr. Bernard O'Shea, principal officer of the tourism service division.

Opening statements will be followed by questions from members of the committee. As the witnesses will probably be aware, the committee may publish opening statements on our web page after the meeting.

Regarding parliamentary privilege and the practice of the Houses as regards references that may be made to other persons in evidence, the evidence of witnesses physically present or of those who give evidence from within the parliamentary precincts is protected pursuant to both the Constitution and the statute of absolute privilege. Witnesses are reminded of the long-standing parliamentary practice whereby they should not criticise nor make charges against any person or entity by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging to the good name of that person or entity. If, therefore, their statements are potentially defamatory in respect of any identifiable person or entity, they will be directed to discontinue their remarks. It is imperative they comply with any such direction.

Members are reminded of the long-standing parliamentary practice to the effect they should not make comment on, criticise nor make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.

I invite Mr. Ó Lionáin to make his opening statement on behalf of the Department.

Mr. Cian Ó Lionáin

I am delighted to have the opportunity to discuss this important issue with the committee. I am joined by my colleague Mr. Bernard O’Shea, the principal officer dealing with tourism policy development within the Department. We listened with great interest to what the representatives of the vintners' associations said earlier and the discussion the committee had in April on this issue.

Many of the key figures have been rehearsed but I might recap some of the important ones for the sector. In 2019, pre-Covid, tourism was worth €9.5 billion in total to our economy, translating into about 260,000 jobs and €1.8 billion in Exchequer revenue. As the sector rebuilds post Covid, it is hoped we will reach about two thirds of that level and volume in 2022, which would make it among the very strongest rebounding tourism sectors in Europe.

Prior to Covid, the sector registered consistent increases in the numbers employed in Ireland’s regions and was an important driver of greater regional balance and dispersed economic activity. A sustained and, importantly, sustainable rebuild is essential given tourism supports communities and regional development in a manner unlike most other sectors. The Minister at my Department, Deputy Catherine Martin, has worked tirelessly with colleagues across government to secure funding supports to keep the tourism sector alive during Covid-19 and then to support this initial rebuild phase. It was very good to hear representatives of the sector acknowledge the good collaboration that has existed between the Government, the Department and the sector.

This year, again, the Government is providing a record level of funding for the tourism services budget, totalling €288 million. This includes €50 million in business continuity funding and a €35 million increase in the tourism marketing fund to support the delivery of a marketing strategy to help restore inbound tourism. In addition, capital funding of €36.5 million has been provided for tourism product development to deliver enhanced visitor experiences. The sector faces a range of challenges, however, in common with the wider economy, such as sizeable increases in the costs of key inputs and difficulty in recruiting and retaining key skills. Again, the earlier conversation was very illuminating in that regard. These challenges are not unique to Ireland. Indeed, they are shared by many countries around the world.

The wider tourism and hospitality sector is a shared concern for both my Department and the Department of Enterprise, Trade and Employment as well as a range of other Departments. Restaurants and pubs are a key part of the céad míle fáilte Ireland offers to visitors. However, as Fáilte Ireland has previously advised, about 80% of pub and restaurant trade is not tourism related. This shared mission is reflected in the hospitality and tourism forum established earlier during the pandemic, which is co-chaired by the Tánaiste and the Minister, Deputy Catherine Martin.

The forum is a valuable opportunity for both sectors to communicate their priorities and it is hoped to convene it again in the coming weeks.

At official level, we engage regularly with our counterparts in the Department of Enterprise, Trade and Employment on issues such as work permits and other matters that impact on tourism and hospitality. As an example, both Departments are represented on the tourism and hospitality careers oversight group, COG, which brings together industry representatives, State agencies, Departments and the education sector. The group has pivoted to focus on supporting the industry to address some of its immediate recruitment challenges in the months ahead.

Staffing shortages are not just a problem in the tourism sector. Other sectors of the economy are facing the same challenge and it is common in tourism around the world. When Fáilte Ireland appeared before the committee, it estimated that there were approximately 40,000 vacancies in the industry across all roles. The Department and Fáilte Ireland are working with industry and across Departments to ensure a co-ordinated approach to addressing the labour and skills shortages.

Delays in the processing of work permits for chefs is a particular challenge for the sector, as noted previously at this committee. The Department and Fáilte Ireland have engaged closely with the Department of Enterprise, Trade and Employment to try to expedite chef employment permit applications that are already in the system, given the immediate pressure to recruit staff for the 2022 season. All flexible resources have now been redeployed by the Department of Enterprise, Trade and Employment to address processing times for general employment permit applications. Processing times for trusted partners has decreased from 22 to 16 weeks as of mid-May. Processing times for standard applicants remain at 22 weeks but should begin falling in the coming weeks. The Department of Enterprise, Trade and Employment expects to see processing times for general employment permit applications being considerably reduced by the end of quarter 2, with further reductions in processing times across all permit types in quarter 3.

Our Department continues to engage with the Department of Further and Higher Education, Research, Innovation and Science regarding the tourism recovery task force's recommendations, which were to strengthen Fáilte Ireland’s COG and formalise a relationship with that Department to ensure programme development and co-ordination of tourism education and training; develop a national tourism education gateway as a one-stop education access shop for all tourism employees; and ensure consistency in the quality and content of education and training provided by education providers in the tourism sector, in consultation with industry, to meet adapting needs and trends.

Regarding working conditions in the sector, Fáilte Ireland’s research indicates that 70% of people are very happy with their employment in the industry, enjoy going to work and see tourism as a long-term career option. This is a good proportion, but we would like it to be higher and Fáilte Ireland has a range of programmes to build skills and capability for businesses and individual employees, including a suite of online self-directed professional development courses.

As part of the drive to promote tourism as an attractive sector within which to work, Fáilte Ireland has launched a new "Excellent Employer" programme to help all participating businesses to improve their employer practices and build their reputations as excellent employers. It has also launched a transition year work placement programme and a major recruitment awareness campaign called "Works for Me".

When we look at the wider economy and the particular set of challenges facing the tourism industry, it is clear that a collective and concerted multi-stakeholder approach to tackling these challenges is required. That is the approach that the Department will continue to pursue.

I look forward to members' questions.

I thank Mr. Ó Lionáin. I invite Senator Byrne to speak first, as he is under pressure to return to the Seanad.

Deputy O'Sullivan is under pressure as well. I appreciate my colleagues' co-operation. Mr. Ó Lionáin's Minister is before the Seanad dealing with another aspect of her large brief.

Mr. Ó Lionáin will have heard the concerns expressed by the Licensed Vintners Association, LVA, and the Vintners' Federation of Ireland, VFI, during the previous session. He is well aware of those concerns. Does he wish to make an immediate response to their submissions?

Mr. Cian Ó Lionáin

Does the Senator wish me to refer to any specific aspect of their submissions?

Mr. Ó Lionáin referred to a number of the issues, for example, the immediate challenge of ensuring that we have the necessary staff for this summer, but the groups also spoke about the COG's report and so on. There is also the longer term question. Has Mr. Ó Lionáin any observation to make on our dialogue with the groups?

Mr. Cian Ó Lionáin

Yes. There are two key challenges for the sector - staffing and cost. Regarding cost, which is not always the same as value for money, an important message for tourism and hospitality is that it is vital that the sector maintain its long-term value for money proposition. We will never be the cheapest destination in the world. As such, it is about providing good value and thinking about pricing in the long term.

Fáilte Ireland is doing a great deal of work on accessing talent pools. We are on the COG, where we work with Fáilte Ireland. Fáilte Ireland is giving support to the industry to build relationships with further and higher education providers. It is considering opportunities overseas, including specific trade and recruitment fairs. It is working with the Department of Social Protection on the pathways to work strategy and trying to improve opportunities for tourism businesses to recruit from the live register. It is also focusing on transition year to try to build a relationship with the sector and have it seen as a career for life. Fáilte Ireland is doing a great deal of work internationally. It is also engaging with the European employment services, EURES, platform, which is a European co-operation network for employment services. Within the COG, Fáilte Ireland is leading a new working group to support the industry in accessing talent pools in wider EU markets. We are competing with other economies in that regard, but our Department is trying to support Fáilte Ireland in that work so as to ensure that the sector can continue to grow in the coming years.

I wish to ask about the night-time economy, which ties in closely with tourism and hospitality. The Minister is committed to the plan for rolling out an effective strategy for the night-time economy. Tied into the reform of licensing laws, when will we start seeing avenues for late night openings of entertainment venues, which would support our towns and cities in having even more of a vibrant night life than is currently the case?

Mr. Cian Ó Lionáin

I will not be able to go into detail on the Senator’s question because the matter is being dealt with by colleagues within the culture division, but our approach is that the night-time economy can help the tourism and hospitality sector grow in terms of its sustainability, extend its reach and use its existing products better and for longer. This is intimately linked with what is happening in the Department of Justice in terms of licensing laws. I will check with colleagues in the culture division and revert with a written update.

I would appreciate that.

It is a fantastic opportunity to have both Mr. Ó Lionáin and Mr. O’Shea with us. Before I ask about the specifics of skills and staffing, I will ask another question related to the Department. From seeing a great deal of coverage recently, the witnesses will be aware of the fears expressed that Ireland is starting to price itself out of attracting tourists to the country or encouraging tourism. I am referring specifically to large hikes in hotel prices, particularly in the Dublin area. Something that is impacting the regional parts of Ireland – I am from west Cork, but this issue extends right up the west coast from Kerry to Donegal – is the extraordinary increase in car rental prices. There have been some reports of increases of more than 200%. What can the Department do, and what does it intend to do, to address this situation? Every constituency office across Ireland is inundated with passport requests. There has been a great demand for passports. This may indicate that people are looking to go abroad instead of holidaying domestically. Perhaps there is a price element to this, with people getting more value for money abroad. If so, that would be a shame. We have bounced back and the hospitality sector has a significant opportunity to bounce back, so it is important that we not price ourselves out of the market and make ourselves uncompetitive on the European scene. Will Mr. Ó Lionáin comment on this situation?

Mr. Cian Ó Lionáin

Those issues have been prominent in the media in recent weeks. As we head into the peak tourism season and tourism’s recovery gathers pace, there is an inevitable pressure on hotel and car rental capacity.

That is a statement of the obvious. Hotels are also dealing with the same cost pressures being experienced by other businesses. Nevertheless, all businesses in what I like to call the wider tourism and hospitality ecosystem have to be mindful of the need for Ireland to maintain its value-for-money proposition and they need to take the medium and long-term perspective. There is a difference between pricing and value, but people need to think of the medium and long term rather than necessarily seeking to maximise profit.

I might outline a few facts and figures on the hotel sector. The Irish hotel sector is rebounding strongly. The Irish Tourism Industry Confederation, ITIC, has conducted research on this and the occupancy rates for Dublin hotels in April was 83.6%, which is way ahead of comparable markets. In London, for instance, it is 72%, while in Rome and Amsterdam, it is 70%. There is a wider question regarding tourism accommodation in general, given this concerns not just hotels but all the other inputs, and there is a compression in the sector. There is pent-up demand as we have come into the summer, the night-time economy is being revived and more concerts are being held. Everything is feeding in to this.

As a Department, we will continue to engage with the sector to encourage businesses to take the long-term view of the value for money they offer and of their pricing in order that we will be able to maintain a long-term, sustainable tourism business. There is some positivity on the horizon. Upwards of 2,000 hotel rooms are in the pipeline for Dublin specifically. I do not have certainty as to whether they will come in this summer or later in the year but I think they will filter in over the year. That will help somewhat but it is a challenge.

Similarly, in regard to car rental, we will give these messages of restraint and long-term perspective. This is not specifically an area of responsibility for us but it does directly impact on the tourism sector. The Car Rental Council of Ireland is part of ITIC. As officials, we will sit down with ITIC and the Irish Hotels Federation to convey these messages, and we will also do that collaboratively with Fáilte Ireland.

There has been much acknowledgement from the hospitality sector that the supports have been incredible during the pandemic. The Minister fought hard for that 9% VAT rate, which we all welcome as a fantastic boost. We have taken steps to help the hospitality sector bounce back. Is there anything we can do, besides sending messages and making requests, to nip this in the bud and to ensure car rental will be affordable in order that when people look to visit Ireland, they will not be turned off by these car rental websites and hotel prices?

Mr. Cian Ó Lionáin

The challenge is that the Department has no regulatory or other function in regard to car rental. From the bit of research we have conducted, it seems the car rental stock in 2022 is 40% of what it was in 2019, so there is that direct challenge between supply and demand. Much of what we can do relates to maintaining the solidarity built earlier during Covid throughout the tourism and hospitality sector, being mindful of the support the Government has given and asking for reciprocity to maintain a sustainable, long-term tourism product. It seems to us there are no immediate quick fixes specifically regarding car rental. Much of it relates to global supply and a lack of cars in the wider pipeline. In a way, had our tourism recovery not been so strong, this would not have been such an issue, but we have 40% of the previous car stock and we might have 70% of the tourists, so there is an immediate mismatch. I suppose it falls into the category of good problems. We would rather not have the problem, but it points to a very strongly performing tourism sector.

I listened, as I am sure Mr. Ó Lionáin did too, to the interview on "Today with Claire Byrne" the other day when somebody reported having been quoted €300 per day to rent a car, amounting to almost €1,000 for three days. It was the owner of an artisanal food business. I did not catch the beginning of the interview but the man was making the point that there was no suitable public transport and the business was depending on tourists to come in rented cars, so the odds were very much stacked against the business in that regard.

I thank both our guests for attending and for their presentation. We had the advantage of hearing from representatives of the sector itself before the officials joined us. One key issue I took from that earlier session related to the call regarding how that industry is falling between two stools. I acknowledge the Department has done amazing work, and we would be the first to pay compliments to the officials and the Minister in respect of how the Government and the Department got behind that sector earlier during Covid to give it every possible opportunity not just to survive but to succeed. Our guests from the previous session made the point that many of their industry's businesses would not be here today had that not been in place and the Department has to be sincerely congratulated on that.

On the point that the industry is falling between various stools, can our guests see any solutions for what the representatives of the sector outlined as the problems? I can see where they were coming from. The sector is caught between the Departments of Enterprise, Trade and Employment, Further and Higher Education, Research, Innovation and Science and that of our guests. The industry needs just one Department to be a one-stop shop that can address issues as they arise in the sector. Does Mr. Ó Lionáin have any thoughts on that?

Mr. Cian Ó Lionáin

Thoughts, yes, but immediate and quick answers, perhaps not. Covid has shown us the very significant value of the sector to the economy. We really understood that when it was gone. As I said earlier, it involves 260,000 people, reaching into every parish. At the moment, the way in which the Government engages with tourism is quite clear. The Department has a clear lead role in Fáilte Ireland and Tourism Ireland and we deal with policy and funding. The wider hospitality sector is more diffuse and spreads across a number of Departments. For example, the Department of Justice deals with licensing, while local authorities deal with the Department of Housing, Local Government and Heritage. Similarly, the Department of Enterprise, Trade and Environment deals with work permits, a vital issue, while we work with marketing and tourism and the Department of Further and Higher Education, Research, Innovation and Science deals with the issue of skills.

One of the positives of Covid was that all those Departments worked very well together and got a very good and consolidated view of how this sector is an entire ecosystem, with everything interlinked. There are long-term learnings from this. Earlier during the pandemic, the hospitality and tourism forum was established by the Tánaiste and the Minister at my Department. We and the Department of Enterprise, Trade and Employment have worked closely. There are certainly long-term questions to be answered as to how best to build on that co-operation, and we have heard the sector repeatedly ask for clarity on who leads on hospitality. They are conversations we will have to reflect on and discuss with our Minister and Ministers throughout the system. In any event, we are certainly in a much better position, post pandemic and having worked so closely together, to come up with answers that might help the sector thrive into the future and determine that clear lead.

My next question might be better directed at Mr. O'Shea. It relates to comments and observations the representatives of the sector made during the earlier session. They talked about Fáilte Ireland’s very successful efforts to encourage people to get involved in the sector in the context of recruitment. They felt that while the campaign is only just up and running, it has been very successful. I think we are all aware somewhere at the back of our heads, having listened to discussions about it on the radio, of the need to encourage young people, in particular, to get involved in, and to consider a long-term career in, this sector. Our guests in the previous session felt people do not necessarily make the connection between what Fáilte Ireland is talking about with regard to the hotel sector and their own sector, comprising pubs and so on. Is there anything that can be done in the tourism sector to respond to that call?

Mr. Bernard O'Shea

As Mr. Ó Lionáin noted, both Fáilte Ireland and the Department are represented on the careers oversight group, working closely with industry, hotels, the vintners' associations and restaurants, and we will certainly be happy to take those comments on board. The vintners' associations referred to the plans that will emerge from the careers oversight group and we will certainly take those observations on board. On, a range of courses and careers are provided for and highlighted, including in the wider hospitality sector.

In practice, there is quite a degree of support for careers within the wider hospitality sector, but we will certainly take on board the comments of industry this morning.

I believe their point was more about promotion, to plant the idea in people's heads that this is something we should be considering.

Mr. Bernard O'Shea

We will certainly talk to Fáilte Ireland about emphasis in the campaign. That might be something it can take on board.

In terms of what was said about education, the courses now being run in Griffith College through SOLAS and the further education avenues, is there more happening in the background of which we are just not aware? Are there more education courses in the tourism career area?

Mr. Bernard O'Shea

In terms of the education piece, I checked this morning and found 230 courses highlighted for the tourism and hospitality sector. I was quite impressed, frankly, by what was available. Perhaps there is a need to increase awareness around that. What is very useful is that a lot of those courses are very well dispersed throughout the country.

Who is delivering most of them?

Mr. Bernard O'Shea

Delivery is right through higher and further education sector. There are references to Griffith College, for example, but the courses are not in any way limited to tourism and the delivery is through the higher and other levels of the education sector.

I welcome Mr. Ó Lionáin and Mr. O'Shea and thank them for their opening statement and their ongoing work in the Department.

I seek an update on progress made on the recommendations of the tourism recovery task force with specific reference to enhancing sustainable employment. I am aware there was a €10 million programme for professional development supports. Will Mr. Ó Lionáin provide an update on how that programme is being implemented?

Mr. Cian Ó Lionáin

I will ask Mr. O'Shea to answer that because he has been working very closely with the group and on the development of our sustainable tourism policy.

Mr. Bernard O'Shea

I am happy to update the Deputy on that. In terms of the funding, Fáilte Ireland's total funding in the area of sustainable employment this year will be of the order of €5 million. This has been combined with funding for its digital programme around Digital that Delivers, which enhances the education available to tourism employers and tourism and hospitality businesses. In terms of that funding programme, that has been achieved.

In terms of the other recommendations of the task force, one of them was that we would formalise our engagement with the Department of Further and Higher Education, Research, Innovation and Science, and we have made some progress on that. We continue to work and engage with that Department. A task force is going to be set up to look at the particular recommendation around the establishment of what was referred to as a tourism gateway, to make it clear where all of the career possibilities lie, to make it clearer how a person could have a tourism career and to make the career pathway clearer. We will continue to engage with that Department and look forward to participating in the subgroup.

Has the committee been established? Has a timeframe been agreed?

Mr. Bernard O'Shea

That work is under way at the moment. We expect to hear from the Department of Further and Higher Education, Research, Innovation and Science on that very shortly.

We have a recovering labour market here and are almost back to pre-pandemic levels of employment. The estimate for 2022 is the unemployment rate will be around 6%. There is a real challenge there for the tourism and hospitality sector. One element that is often forgotten about is youth unemployment. I want to understand how the Government can respond to this across various Departments. The Department of Social Protection is trying to drive down the live register, while the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media is trying to recruit. Are there discussions among various Departments regarding a whole-of-government approach to youth employment support programmes? Is work going on to make young people aware there are careers within the sector? Is there an entry programme to enable them to get off the live register and move into the sector?

Mr. Bernard O'Shea

The Deputy has raised a number of issues there. In terms of engaging with people who might be unemployed, Fáilte Ireland liaises directly with the Department of Social Protection on the pathways to work programme. It has found that programme to be a good avenue for assisting with the provision of people to fill vacancies. In terms of young people, Fáilte Ireland has reached out to the third level colleges to make students aware of opportunities and has put students in touch with employers for seasonal vacancies, for example. It is also doing work in secondary schools with the school-leaver cohort to make them more aware of careers in tourism and how they might be able to take advantage of that later in their careers, as they make their way through the education pathway.

Do we have any figures on the pathways to work programme Fáilte Ireland is working on in collaboration with the Department of Social Protection? Is there a success story there to demonstrate the work being done is valued?

Mr. Bernard O'Shea

I do not have numbers to hand but I am happy to provide them in the coming days. I can say that under the transition year programme on which Fáilte Ireland engages with secondary schools, 600 placements have been made. That is an illustration of progress.

In the previous session we discussed the challenges faced by employers in the hospitality sector when they identify staff, be they chefs or bartenders, but they cannot accommodate them. The candidates may be coming from outside the EU, from Europe or even from some other part of Ireland but accommodation is a real issue. I know the Department is aware of this but is there anything it can do to ease that problem?

Mr. Cian Ó Lionáin

I thank the Deputy for his question and, again, it is an issue that does not have an easy solution. Indeed, in addressing some of the accommodation needs of staff in the tourism sector, hotels and others are often using some of their own accommodation, which then further squeezes availability for tourists. Our focus is on trying to keep open the pipeline of people engaging in the tourism experience. Our focus is also on trying to ensure the long-term value for money proposition is maintained. The accommodation issue is particularly extreme in Dublin and the major cities but we are also seeing it along the Wild Atlantic Way, where there is a real squeeze on both hotel and worker accommodation.

Mr. O'Shea might be able to elaborate further on the discussions we have had with Fáilte Ireland on this. We are alive to this issue and perhaps my colleague has something to add.

Mr. Bernard O'Shea

There is nothing definitive but we are very much aware of the problem. I will refer to Dingle as an example. Dingle is a very busy tourism destination during the summer and trying to source accommodation for workers in the sector is a particular challenge during the summer. It is part of the national housing challenge and, as industry representatives have said, the solutions lie in the Housing for All initiative.

The discussion has centred around the challenge of recruitment and I can give examples of people from hotels and restaurants who have been in touch with me about this.

They had placed advertisements for positions in newspapers in July and it was November by the time they got a response with respect to filling those positions. Those are good reputable hotels which are good places in which to work. Some hotels have changed from advertising in regional newspapers on a monthly basis to a weekly basis, which involves a cost factor. The witnesses are aware of the challenges but those examples underline the difficulty in recruiting staff. I appreciate the efforts and initiatives taken by Fáilte Ireland and by the Department to encourage people and get the message out that hospitality is a good career option. Is the Department of the view there is still a hang-up from the pandemic, or a nervousness about the sector because of what happened during the pandemic? Even though wages might increase and job security in the sector might become more positive, is there a nervousness about the sector because the next pandemic might be around the corner and the industry might shut down? Is there a hang-up about that? How would the Department address such nervousness about the sector?

Mr. Cian Ó Lionáin

I do not know if I would go so far as to call it a hang-up but there is certainly some background noise internationally in terms of international travel and tourism planning in the long term, whereas prior to the pandemic people would be already planning for 2023. We have found that the timescales within which people are planning their travel and tourism are much more truncated. If we follow that through to what is happening on the ground, it would probably be a reasonable assumption that there is a certain carefulness in planning to be a tourist or to work in the sector.

Having listened to the committee's conversation with the VFI, I was heartened to hear that employers are now focusing on the employees, on making the sector a good place in which to work and on working with employees to ensure a long-term employment relationship is built. That is where the focus needs to be. Fáilte Ireland is doing its excellent employer programme to ensure we produce a generation of people who will view this as a sector they really want to work in because they can stay in their own communities and can do really meaningful and interesting work. It is a very important economic sector but it should always be viewed as a valuable place in which to work and to have a meaningful career. That is what we are trying to push.

That concludes our business today. I thank the gentlemen for their presentations. I hope we might be able to take action on some of the ideas and suggestions from our earlier witnesses today. I thank the witnesses before us who have responded very well to those suggestions. I know they are working furiously in the background on this issue. The truth of the matter is that this issue affects many sectors - not only the hospitality sector but also the retail sector and many others. The problem of recruiting and retaining staff is one we are all hearing. It is a major challenge. The bigger picture from the VFI's message is that it is a long game and we must put a plan in place that will map out over the next three or four years how we will get people to take up courses or to view employment in the sector as a long-term career. It is a challenge but I have no doubt that the witnesses are well capable of addressing it in their Department. I thank them both.

I also thank colleagues for joining us. The committee will met in private session via MS Teams at 11.30 a.m. on Wednesday, 1 June 2022.

The joint committee adjourned at 3.44 p.m. until 1.30 p.m. on Wednesday, 15 June 2022.