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The state could face a billion-euro bill from the hotel sector if it loses legal action over the impact of Covid-19 restrictions, a leading economist warned.
The case is being taken by Press Up Group, one of the largest hotel companies in the country.
In the proceedings against the Minister of Health, the Minister of Finance and the State, the group claims that it is entitled to compensation for its losses as a result of the blocking measures, which it alleges are unconstitutional and a disproportionate interference in property rights.
In a report commissioned by the hospitality group, economist Jim Power predicted that the economic repercussions for the state, if it does not successfully defend the case, could be “severe” and result in a bill of up to 1 billion euros from the hospitality sector. the hospitality industry.
The report advocates a move back to Level 2 restrictions from early December, saying that any higher level would effectively destroy what is its most important month of the year for the sector.
Power also said that the continuation of the Level 5 restrictions through December would cost the treasury around 300 million euros in lost revenue and more than 120 million in pandemic unemployment payments (PUP).
The report comes as the government considers plans to lift the Level 5 blockade.
Stores, gyms and hair salons are expected to reopen on December 1, but restaurants and pubs serving food are expected to have to wait another week, while wet pubs are unlikely to reopen sooner. of Christmas.
Press Up, which is controlled by entrepreneurs Paddy McKillen Jr and Matt Ryan, claims in its lawsuit that it could suffer € 20 million in losses as a result of the Covid restrictions.
The group operates 55 hospitality companies in Dublin, Cork and Westmeath, including The Workman’s Club, Elephant & Castle, The Stella Theater and The Dean Hotel, and employs around 1,800 people.
In his report, Mr. Power said that December generally represents about 30% of the annual turnover of the hotel sector and that the impact would be “catastrophic” if serious restrictions persist.
He argued that the current policy was driven by “circumstantial evidence rather than scientific evidence.”
Power said an analysis of data from the Health Protection Surveillance Center shows that of the 8,311 outbreaks or clusters since March, restaurants and cafes accounted for 39 or 0.4%, hotels 10 or 0, 1%, retail outlets accounted for 26 or 0.3%. , while private houses represented 6,228 or 75%.
“You could say that the enforced restrictions on restaurants and hotels have forced people to socialize at home, which is an uncontrolled environment,” he said.
“Policy should be aimed at getting people to interact where social distancing is possible, in an environment that is as controlled as possible, while accepting that there is very little risk-free.”
Mr. Power also cited a ‘Sunday Independent’ report that revealed a senior public official’s understanding “that there is no evidence of an increase in claims” for the benefits of Covid disease in the restaurant and hospitality sector.
The comment was made by Dr. Orlaigh Quinn, secretary general of the Department of Business, Trade and Employment, in an email to other senior public officials in mid-September.
“If community transmission comes from those who use the restaurant / hospitality sector, we would expect to see it in those workforces,” he wrote.
Power described figures that indicate the hospitality sector was disproportionately affected by the restrictions.
Of 350,072 people in the PUP in the week to November 17, the accommodation and food services sector accounted for 102,682 or 29.3 percent.
48.4% of those who received PUPs that week were under 34 years old and 25.5% were under 25 years old.
“Many of these young people work in the hospitality sector and have been the most affected by the crisis,” said Mr. Power.
The economist also warned that the government’s policy would expel thousands of workers from the tourism sector permanently.
“Without qualified and experienced staff, and adequate high-quality hospitality businesses, it will be difficult to rebuild tourism and restore its former contribution to employment and the overall economy,” he said.
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