OVER A QUARTER OF NI HOSPITALITY BUSINESSES NOW OPERATING AT A LOSS
10 June 2025
Over a quarter of Northern Ireland hospitality businesses now operating at a loss
Following the implementation of extra costs that hit the sector in April, a significant number of pubs, bars, restaurants, and hotels are now losing money and are at risk of failure.
A new survey of hospitality operators across Northern Ireland lays bare the impact of recent increases to employer National Insurance Contributions (NICS) and above inflation wage increase on hospitality businesses, with 27% of operators stating that they are now operating at a loss and 20% stating that they have broken even. Just 6% of respondents stated that they have made a greater profit at this stage in 2025 than in 2024.
Undertaken last month (May) by industry bodies, Hospitality Ulster, UKHospitality, The British Institute of Innkeeping, and the British Beer & Pub Association, the survey is the first indication of the devastating effects of the changes that hit Northern Ireland hospitality businesses in April.
The effects are already so dramatic that the NI Assembly’s plan to double tourism looks doomed to fail as a result. 45% of respondents stated that they had cancelled investment in preparation for the cost increases, with 35% cancelling investment since April.
49% of operators reduced the number of staff employed in anticipation of the cost increases and 33% have done so since April 2025. 51% of respondents stated that their workforce has decreased in the last 12 months, with just 9% reporting an increase.
These factors have inevitably resulted in a pessimistic feeling throughout the industry, with just 22% of operators stating that they are optimistic about their trading prospects over the next 12 months, with just 2% stating that they are very optimistic. 49% stated that they are pessimistic regarding the next 12 months, 20% of them being very pessimistic. This pessimism has led to feelings of uncertainty within the sector, with 33% of operators stating they are unsure if their business is at risk of failure in the next 12 months.
Operators are demanding action from both the UK Government and the Executive in order that the sector can thrive and play its full part in economic growth, job creation and high street revival, calling for a reversal to Employer NIC changes, a VAT reduction for hospitality, and expedited delivery of lower business rate multipliers.
Colin Neill, Chief Executive, Hospitality Ulster, said:
“The results of this survey are further proof to what Hospitality Ulster has been warning of for a long time: that the cost of operating is simply too much for Northern Ireland’s hospitality sector, which will suffer significant damage unless government support lifts the boot off our necks.
“How does the NI Executive expect to deliver their Programme for Government plan to double tourism in the next 10 years without the policies in place to deliver it? Put simply, hospitality accounts for four out of every five jobs in tourism and takes two thirds of the tourism spend. You can’t double tourism whilst you allow the hospitality sector to fail.
“Hospitality is worth £2 billion annually to the Northern Ireland economy; it accounts for 72,000 jobs and is the fourth largest private sector employer. Jobs are being lost, livelihoods under threat, communities set to lose precious assets, and consumers are experiencing price rises when wallets are already feeling the pinch. All of this will cause significant damage to both the local economy and local communities.
“The UK Government and Stormont Executive must act urgently. Our survey tells us that the most urgent issues for operators here are a VAT reduction for hospitality, the reversal of the Employer National Insurance contributions, and the alignment of business/non-domestic rates in devolved nations to match incoming reforms in England. In return for these supports, the hospitality industry can return to investment, job creation, and growth in communities. Without them, these surveys will grow more pessimistic, more jobs will be lost, and the local economy will be further weakened.”