Hospitality sector faces crisis, warns Colin Neill
“Northern Ireland’s hospitality industry never got a chance to recover before being again the worst affected by the impact of the cost-of-living crisis, and now facing a critical situation as April 2025 looms ever closer, due to the impact of the UK Autumn Statement,” says Colin Neill, Chief Executive of Hospitality Ulster, as he reflects on the challenges faced in 2024.
The sector, which supports over 77,500 jobs and contributes almost £1.9 billion in gross value added (GVA), is struggling under the weight of mounting costs. “The combined impact on the changes to ENIC at the same time as a substantial rise in the National Living Wage will add an additional £2,500 per person employed in the sector (based on a member of staff earning NLW and working 38 hours a week),” Neill explains.
He points out that the structure of employment in Northern Ireland’s hospitality sector exacerbates these pressures. “In Northern Ireland, 63% of jobs in accommodation/food are part-time, the highest share across all sectors by a considerable margin. This means that more of these jobs are likely to be drawn into the significant NIC threshold reduction.”
Neill says these rising costs make it nearly impossible for businesses to remain competitive, particularly against counterparts in the Republic of Ireland. “The UK Budget has now made Northern Ireland a more expensive place than the Republic of Ireland to employ staff, and with a further reduction of VAT likely, ROI now has a competitive advantage over NI. This will not only drive investment from the North to the South, but also consumers as our hospitality businesses will not be able to compete with our ROI counterparts.”
“These are a significant additional cost burden on a sector that is already under huge pressure in terms of sales, costs and profitability. Staying in business is very challenging as the fall-out from Covid continues for the sector and also due to the huge additional costs we have faced. Heaping additional and completely unexpected costs on top of this only fuels that journey towards crisis point for many of our members in the hospitality sector.”
Neill is calling for urgent government action, urging the NI Executive to implement measures such as an interim financial support package, business rates relief, and a reduced VAT rate for hospitality and tourism. “We have gathered our evidence and are now in talks with Government departments, laying out our arguments, backed by detailed proposals on the support required.”
“If no support is forthcoming, our hospitality industry and as a result, our tourism infrastructure will be set back years, as hospitality businesses fail, downsize, or redirect investment to the ROI.”
