22 June 2022


Current cost of doing business, lack of customer disposal income and labour shortage a triple threat to the Hospitality sector warns Chief Executive at AGM

The cost of living crisis and labour shortages are having a severe impact on the hospitality industry’s viability according to Hospitality Ulster, with some businesses already having to make difficult decisions.


Concerns raised at the Hospitality Ulster AGM, which took place in Belfast today, are being reflected across the entire sector with many business owners reporting that they are struggling to remain open due to spiralling costs of energy and raw materials, as well as a lack of staff at all levels. 


Some premises have been forced to close for a number of days of the week due to staff shortages and to give colleagues some well-deserved rest.


Other significant issues raised at the AGM included the high rate of VAT at 20%, which puts businesses at a significant disadvantage when competing in the tourism market with the Republic of Ireland (whose VAT sits well below at only 9%) and Business Rates which Hospitality Ulster has been working to get a better outcome for the sector.


Central to the concerns of the membership of Hospitality Ulster was the need for the Executive to bring forward a dedicated hospitality strategy to find practical policy solutions and support for the problems that can be dealt with at a local level.


Tony O’Neill of Coppi and Stephen Magorrian of the Horatio Group continue on as Chair and Vice Chair respectively for their second year in term.


Addressing Hospitality Ulster’s AGM, Chief Executive, Colin Neill, said:


“The stark reality of the hospitality landscape was laid bare at today’s AGM with members voicing real concern over the future of the sector moving forward.


“Pulling down shutters for part of the week due to lack of staff, cutting menu items due to food costs, or simply ceasing trading due to rising costs is happening across the industry and interventions are urgently required to stave off the worst impacts of these factors out of our control. 


“The hope that 2022 would be the year of bounce back for hospitality has been severely dashed as we bear the brunt of a workforce crisis while also contending with spiralling business costs and a VAT rate that is stifling progress.


“People now have less disposable income to spend at their local pub, restaurant, or coffee shop and with a further rise in inflation expected, how are we meant to survive?


“We are working to provide workable solutions to these looming issues, and despite the lack of Executive and Assembly, it is important that our elected representatives be live to the challenges and engage the sector on what actions can be implemented. This starts with a hospitality strategy that can help resource and support the industry get back on its feet, and properly work to regain its position as a £2bn a year sector.


“This is a time when we should be embracing the sector and using it to help kick start the economy. As an industry we are a significant employer; the fourth largest private sector employer in fact and a sector that can generate revenue – we just need support at a time when there are many external factors applying so much pressure on us.”


Colin Neill continued:


“I’d like to thank our Chair Tony O’Neill and Vice Chair, Stephen Magorrian for their continued support and dedication to our industry as they enter their second year in office. There is no doubt that these have been some of the most challenging months experienced by the sector and the calm, strong presence of both Tony and Stephen has reassured many within our industry. I look forward to continuing to work alongside both in the next year as we represent hospitality across Northern Ireland.”


Tony O’Neill, Chair, Hospitality Ulster said:


“As a restaurant owner, I am fully aware of the crippling issues that are presenting to our industry every day and it has been extremely worrying to hear from colleagues today how some businesses are truly on the brink.


“The ongoing labour shortage is causing havoc to all businesses in the hospitality sector, and as an industry which is people centric, this is a terrible position to be in. Working alongside Colin and the Hospitality Ulster team, I will put all my energy in to finding solutions that work for our sector to promote hospitality as a fantastic industry to work in.


“My first year as Chair has seen many challenges, starting with the industry at a real low last summer, battling to reopen. There is continued strain with problems of the cost of living crisis, escalating business costs and the labour shortage all curtailing businesses viability and vitality. 


“In my second year as Chair, I will continue to engage with our industry to support businesses on all these issues, as well as pushing to make changes to other challenges we face including the high rate of VAT, which puts us at a real disadvantage when competing in the international tourism market, and the tailoring of a rates system that doesn’t put a strangle hold on progress and reinvestment.


“I would like to extend my thanks to my Vice Chair, Stephen Magorrian, Chief Executive Colin Neill, and the wider Hospitality Ulster Board for their unwavering support and advice throughout my first year as Chair.”


Stephen Magorrian, Vice Chair of Hospitality Ulster said:


“Working alongside Tony and Colin has been a real privilege over the past year as we have fought for the industry which I have been a part of for decades. I have got to see the best of the sector over the past twelve months and recognise the real resilience of our members who have taken hit after hit – be that the pandemic or the current joint crises of cost of living, workforce and business costs.


“As a business owner, I am experiencing the pressures of the current business landscape. It is no exaggeration to say that intervention is required urgently to support the industry. The concerns voiced at today’s AGM only underscored the fact that hospitality is in a crisis and it will take resourcing and actions to help us resume normal trade.”