Hospitality: A Value Chain Analysis 2021

This chapter explores earnings generated by employment in the Hospitality sector. This includes the median annual earnings, compensation of employees (COE) and the Employment Wage Subsidy Scheme (EWSS) which helped to keep employees on payroll during the COVID-19 pandemic. Data sources such as the Labour Force Survey, real-time PAYE modernisation data from the Revenue Commissioners, admin sources and National Accounts were used to generate the following statistics. 

Earnings

Figure 2.1 looks at median earnings per employee in 2021 in the Hospitality sector using administrative PAYE data. On average, employees earned €24,099, however there was a significant difference overall between median earnings in the Accommodation and in the Food & Beverage sectors. Employees in Accommodation (€27,307 per employee) earned €5,111 more than employees in Food & Beverage Services (€22,196 per employee) in 2021. 

Compensation of employees (COE) measures the total cost to employers of employing staff. It includes the wages paid to employees and also social contributions paid by employers on behalf of their employees. COE by year and detailed activity is shown in Figure 2.2 below. In 2021, the subsectors with the highest COE were Restaurants & Mobile Food Service Activities (€1.4 billion), Hotels & Similar Accommodation (€1.1 billion) and Beverages Service Activities (€630m). As expected, COE declined sharply in 2020 due to COVID-19 related business closures. The industry rebounded in 2021 but it was not until 2022 that COE returned to pre-pandemic levels. 

Restaurants & Mobile Food Services sector saw the strongest growth after COVID-19, with COE almost 17% higher in 2022 than in 2019. 

Employment Wage Subsidy Scheme

The Employment Wage Subsidy Scheme (EWSS) was used to subsidise reduced working hours and furloughed employment during the COVID-19 pandemic. Figure 2.3 shows the total value of the EWSS paid to employers by month and subsector in 2021. Overall, the largest beneficiaries of EWSS were in the Food & Beverage Services sector, receiving €667m in EWSS throughout 2021. The Accommodation sector received €507m in the year. 

A partial reopening of the Hospitality sector began in May, and while certain restrictions were eased during the summer months, working hours and business capacity were still significantly limited. Figure 2.3 mirrors the trend observed in Figure 1.3; the total jobs in Hospitality rose throughout the summer, however, the wages paid to employees were still subsidised through the EWSS. 

The total value of EWSS received by each economic sector in the whole economy in 2021 is shown in Figure 2.4. EWSS in Accommodation & Food Service Activities was the largest of all sectors by a significant margin, amounting to €1.2 billion in total. Given how susceptible the sector was to COVID-19 related business closures, it is unsurprising to see strong dependence on EWSS during the pandemic affected years. In the Total Hospitality sector EWSS was 34% of COE in 2021.