Last year was tough 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.
The Stormont Executive must support the sector, which is key to local economic performance. In the short term this must be an interim support package to mitigate the budget’s damage; longer-term actions include supporting our campaign to get VAT reduced by Westminster and the delivery of a fairer, banded business rate system that better recognises different sectors’ profitability.
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.
This means it is now more expensive to employ staff in Northern Ireland than in the Republic, driving up costs and making us a less desirable place for customers as our hospitality businesses will not be able to compete with our RoI counterparts.
As a result of our lobby, 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 may take time, we need an early and firm commitment that support is coming from the 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 will work to reassure both staff and operators that there is a future in the hospitality sector. 2025 will be a year of action for the sector. Our voice will be heard and must be listened to.
- Colin Neill is chief executive of Hospitality Ulster
