CEO UPDATE - AN INDUSTRY IN CRISES

16 September 2022

Whilst the current crises of energy costs and the cost of doing business continues to threaten businesses and jobs across our sector. The UK government has delayed the announcement regarding the energy support package until 23^rd September 2022.

We are facing unprecedented times with pressure on our industry coming from a number of fronts. Consumer spending power has dropped in excess of 30% in Northern Ireland, whilst energy costs have increased, for some businesses, by over 400%. We are also experiencing high inflation in all areas resulting in significant increases in the cost of doing business. We have the ongoing issue of pubs and hotels paying excessive rates based on turnover, in an outdated system that can result in rateable values being calculated at three to four times higher than they would be if based on rentable value only. And VAT, which was reduced to help businesses during the pandemic, has been raised again to the level of 20%.

Hospitality Ulster is lobbying for support on all these issues on your behalf. Each of them is equally as important as the other for the industry as a whole. But to have any chance, we need evidence to back up our arguments. Hence, we require information from you, which of course, will remain totally confidential and not shared with anyone. We need it to help us model examples to support our arguments for support, which we are seeking both from our Executive in Northern Ireland, and the Government in Westminster.

To compile this evidence, we will shortly issue a series of survey and I appeal to everyone to complete them as quickly as possible.

From a tax raising perspective, our Executive only has control of the Rates bill in Northern Ireland. They have no influence on VAT, other than the ability to lobby the UK Government. We are currently requesting support from them to help with high energy costs and the increasing cost of doing business. The level of support from them, will depend on increased financial support from Westminster. But we continue to engage with NI Ministers and officials to make our case for effective support.

At the same time, in conjunction with our sister organisations UKH and BBPA, we are lobbying for support through a reduction in the current rate of VAT. We are also encouraging support our Exec, and the other devolved Governments to do the same.

As stated earlier, it is important that we seek support on a number of fronts. For some, a reduction in VAT is key, whilst for others a reduction in rates is most important. As an industry as a whole, both are equally important.

Hospitality Ulster is calling for financial support packages to include.

Financial help with energy costs
A business rates holiday
A VAT reduction
Capital grants for alternative energy sources

With the help of BDO NI and a leading economist, we are undertaking extensive research to demonstrate our industries need for financial assistance. As mentioned earlier we will shortly issue a series of industry wide surveys to support this research and I once again appeal for your help to fight your case by completing the surveys as they are issued.

In the meantime, we will continue to work diligently on behalf of all our members

Heating Oil Buying Group

In an effort to reduce costs for members, we are launching a new ‘Heating Oil Buying Group’ using the power of membership numbers to secure lower prices. This will initially be a three-month pilot and continuation will depend on the volume of members using the scheme. To find our more, click HERE membership password required

Solar and or Battery Storage for Electricity

We have also carried our real-life modelling on solar and or battery storage as an additional power source and have secured an exclusive HU member discount. To find our more and see the potential savings, click HERE membership password required

Meeting in Derry-Londonderry

On the 1st November the HU Board will meet in Derry-Londonderry, with an open session in the afternoon where businesses within the hospitality industry will have an opportunity to attend. Details to follow.

Yours sincerely

Colin Neill