Business

‘There’s a huge challenge ahead’ – How the global energy crisis is impacting Limerick’s hospitality sector  

From reducing services to adopting renewable energy sources, Limerick’s hospitality owners are remaining resilient in the face of rocketing input costs

By Aislinn Kelly

Having faced the uncertainty of the pandemic, Limerick’s hospitality sector is now enduring a second phase of precarity with soaring energy costs making for another economically challenging winter.

The current global energy crisis impacting oil, gas and electricity markets has led to bills soaring for businesses across the country.

Established hotelier Sean Lally of Hotel Woodstock has witnessed first-hand the issues rising prices are having on the hotel industry.

All aspects of running the business have been impacted, such as the cost of linen increasing by 40% and gas prices soaring by 300%.

Food importation costs have also posed a problem, with inflated prices influenced by supply chain disruptions and the rising price of fertiliser.

Sean said: “There are huge challenges and it’s frustrating as we are coming out of Covid where we were probably one of the worst industries in terms of being hit. The yo-yo effect of being opened and closed has had a significant impact on business and staff and created all kinds of challenges.”

Co-owners of Hotel Woodstock Sean and Elaine Lally have developed new measures to offset the amounting energy costs.

The issues facing hospitality have a particular impact on rural communities, with the sector making up one in ten jobs nationally and 71% of these jobs are located outside Dublin.

ADAPTION

Like many businesses, Hotel Woodstock is now developing more energy-efficient measures to deal with the crisis. Switching to solar and wind energy is both costly and lengthily process, something Sean believes more government supports are needed in to help industries make this transition away from fossil fuel dependancy.

“We need a more serious strategy long term. If this war has taught us anything it’s that we need to be more energy efficient so if something is going on abroad, it won’t have as big of an impact.”

“Ireland could be the next Saudi Arabia in terms of wind energy, but we seem to be no further down the line than we were a few years ago. There needs to be some serious policy put in place regarding this.”

UNCERTAINTY

For new business owners, the hike in energy prices has meant adopting a permanant state of survival mode. Cian and Síle Murphy finally realised their dream of opening a speciality coffee bar Fika Coffee after twenty years of working in the local hospitality industry.

The café opening coincided with the onset of the second lockdown and now the business has been confronted with a new state of uncertainty.

“We got an electricity bill towards the end of August and it had risen 500%,” said Síle. “It obviously meant we had to evaluate how we were doing things.”

One way of dealing with the price hike was to remove sandwiches from the menu as the sandwich press needed to be plugged in for eight hours a day.

The reduction meant leaving a local supplier, a prime instance of the current difficult decisions businesses are being confronted with.

The multi-roaster coffee shop has had to adopt a more stringent budget in fear that prices will continue to rise.

Síle said: “We would love to employ more people on the team, but we have to keep an eye on everything. In January there’s another rise of the minimum wage which I completely justify because people have to live, but that means our employer contributions go up as well and that’s not taken into account by the government.”

Fika Coffee has had to reduce its menu to afford the rocketing energy costs.

RESILENCE

This state of uncertainty all too familiar for the other Limerick hospitality industries forced to operate in a permanent state of flux.

Limerick start up Crew Brewing Company recently received a bill that had increased five times compared to last year.

Master Brewer Jono Crute has noted that while the sector has been impacted, the challenges are relative in the context of a global energy crisis.

“I would be wary of making ourselves look like the most affected, we are only a few months away from people choosing to heat their homes or feed their families. There are much bigger issues for people than the hospitality businesses,” said Jono.

The electricity price hikes have hit the bar and micro-brewery in terms of storage, production of beer and running the popular bar that first opened its doors during the pandemic.

The bar is a living wage employer, another expense that will rise due to the estimated living wage being raised to account for inflation.

“We are well used to adapting because if you had a business for a long time and have been paying the same for a long time, it would be a lot more frustrating. For us, we have been in survival mode from when we first opened and we are happy to remain in survival mode at the moment.”

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