Most Northern Ireland hospitality ‘operating at under 80% capacity’, new survey reveals

“Unsustainable tax increases are squeezing businesses, stifling growth and investment and threatening local employment, especially for young people.”

Cost increases have forced almost 90% of hospitality businesses in Northern Ireland to operate below 90% of required capacity.

That’s the latest data from a member survey today from hospitality trade bodies. It reveals that tax rises have forced Northern Ireland hospitality businesses to dramatically cut their workforce, with 87% of respondents operating below 90% of required capacity, with the majority (55%) operating below 80% capacity.

Meanwhile 72% of respondents have less than six months of cash reserves, with over one in five (21%) having no cash reserves at all. As a direct result of April cost increases, 68% have increased prices and half (50%) have cut staff numbers.

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The stark results from members of Hospitality Ulster, the British Institute of Innkeeping (BII), the British Beer & Pub Association (BBPA), and UKHospitality come as 84,000 hospitality jobs have been lost throughout the UK since the Budget, which imposed an additional annual cost of £3.4 billion on the sector.

Hospitality businesses here say they are clear about which three measures they believe are most important to drive growth: a reduction in VAT (89%), urgent delivery of meaningful lower business rates multipliers and amendment of April’s changes to Employer National Insurance contributions (both 45%), and alignment of business/non-domestic rates in devolved nations to match incoming reforms in England (38%).

Colin Neill, Chief Executive of Hospitality Ulster, said: “This shocking data reinforces the urgent need for the UK Government and Northern Ireland Executive to recognise the incredible pressure hospitality businesses have been put under, particularly since April, and illustrates why it should come forward with measures to support this vital sector at the Budget.

“Unsustainable tax increases are squeezing businesses, stifling growth and investment and threatening local employment, especially for young people. It is forcing businesses across the sector to make impossible decisions to cut jobs, put up prices, reduce opening hours and sadly limit the support they desperately want to give their communities.

“Hospitality is united in which measures will reverse this trend and drive growth: a reduction in VAT for hospitality, changes to employer NICs and the delivery of a fair rating system through the review currently underway at the Department of Finance.

“Now is the time to act and back a vital sector that supports the economy, jobs, and local communities. We urge the Executive to do so as soon as they can and the UK Government to do so at the Budget this autumn.”

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