2025 MUST BE A YEAR OF ACTION TO SUPPORT THE HOSPITALITY SECTOR
14 January 2025
2024 was a tough year for the hospitality industry in Northern Ireland. Things were difficult as it was for the majority of the year, but the delivery of the UK Government’s budget in October cast a pall over the remainder of the year. While the vast increases in the cost of doing business brought on by changes to employer National Insurance contributions and wage rates will not come into effect until April, operators have had more added to plates that were already full.
It’s no surprise then that the beginning of 2025 has been difficult, and we have already seen high-profile closures. With a mixed performance over the Christmas period for the sector and the upcoming impact of the budget, it is unlikely that these closures will be the last, with every closure undermining our tourism infrastructure and regional economy.
Changes to ENIC and the 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), plus even more significant increases for part-time staff, with the hospitality sector particularly exposed given that 63% of jobs in hospitality are part-time, the highest share across all sectors by a considerable margin.
These government inflicted cost increases have already started to drive up supplier costs, with the recent announcements of supplier price increases, only the beginning of what will most likely be an avalanche of price increases on goods across the board.
We have to-date, provided strong independent evidence to the state of the industry and the additional damage that will result if the Hospitality sector does not receive the support it deserves and desperately needs.
We continue to campaign jointly in Westminster with our sister organisation, UK Hospitality ensuring our voice is heard at the source of the government inflicted cost increases.
On the 22nd January, led by Hospitality Ulster, a representative group of industry businesses will meet with Minister of Finance and the Minister for the Economy in a joint meeting where we will reinforce our evidence with hospitality businesses giving their real-life experience of the challenges they face and what lies ahead if help is not provided.
The Northern Ireland Executive must now support the sector, which is key to local economic performance, before it is too late. In the short term this must be an interim support package to mitigate the budget’s damage, support for our campaign to get VAT reduced by Westminster and the delivery of a fairer, banded business rate system that better recognises different sectors' profitability.
As a result of our campaign so far, we have seen a small but significant step forward, with the announcement that the Department of Finance has commissioned a cost-of-doing-business sectoral study looking at the impact of the National Insurance contributions increases and other factors such as disparities in tax regimes, including VAT, across Ireland.
While we know that introducing legislation to provide financial support would take time, we need an early and firm commitment that support is coming from the NI Executive.
We know who and what we are fighting for in 2025; with continued labour shortages compounding all of the challenges the industry faces, we are also working hard to develop and deliver a series of accredited courses designed to upskill, retain and recruit staff and uplift consumer spend through enhanced customer service and product knowledge. There are several pilots now underway, which will be rolled out across the province once tested and tweaked if necessary.
Whilst it is unlikely that we will get an immediate response at the joint Ministerial meeting on the 22nd, at the very least we need a strong indication that help will be provided. In the coming weeks, members will be invited to attend an online meeting so that we can update you on our campaign to date and discuss our next course of action. Because your voice will be heard and must be listened to.