A joint survey by leading hospitality trade associations of the hospitality sector in Northern Ireland has revealed how the sector fears it will be drastically affected by new employment costs and the reduction in rates relief come April.
The figures reveal that:
- 65% of hospitality businesses in Northern Ireland will reduce their employment levels, risking job losses and lost income for workers.
- 55% would cancel planned investment.
- 26% will reduce trading hours.
- 28% have no cash reserves left, a dramatic increase from 15% in Q3 2024.
- 22% believe they will have to close at least one site.
Hospitality Ulster, The British Beer and Pub Association, the British Institute of Innkeeping, and UKHospitality are highlighting the strong record the sector has in delivering economic growth, with hospitality one of the top contributors to GDP growth in November and December 2024.
They said a delay to the changes to the employer NICs threshold would avoid the immediate impact on jobs and investment revealed in the survey. Instead, it would allow hospitality to deliver economic growth further and faster.
When asked how the Government could support the sector, businesses cited a reversal of employer National Insurance Contribution changes as the second biggest priority after a lower rate of VAT for hospitality.
In a joint statement, the trade bodies said:
“These figures should serve as a clear warning that pubs, brewers, and hospitality venues will be forced to make painful decisions to weather these new costs, which will have damaging impacts on businesses, jobs and communities.
“At a time when hospitality has been one of the top contributors to economic growth, the last thing the Government should be doing is piling on costs that will impact employment and cut off our ability to grow.
“We want to work with Government so we can continue to vitally boost the economy, which is why we urge them to delay the changes to the employer NICs threshold. This would help save jobs and allow the sector to continue on its growth path.
“If it doesn’t act then businesses are clear that the impact on communities, employees and supply chains will be significant. They have warned about potential lost earnings, lost jobs, reduced trading hours and, in some cases, business failure. This would mean the loss of essential community hubs that would otherwise drive the local economy and create jobs.
“Our message to Government is to delay its changes to the employer NICs threshold and allow hospitality to continue to deliver economic growth, regenerate our high streets and support local communities.”
Colin Neill, Chief Executive, Hospitality Ulster, said:
“The results of this survey confirm what we have been telling politicians for years now: that the conditions in which hospitality businesses are being forced to operate will result in closures and the loss of employment. This should be the final warning for elected representatives in both Stormont and Westminster that the upcoming changes in April will be a body blow for many hospitality businesses.
“This will be especially felt in Northern Ireland, where the hospitality sector is the fourth largest employer in the private sector and the backbone of our tourism industry. While we continue to take the fight to Westminster over VAT reductions and the reversal of these disastrous cost increases, we are calling on Stormont to deliver an interim support package to safeguard against the worst of these cost increases and accelerate the process of business rates reform.”