Why Brexit won't deter growth in Northern Ireland hospitality sector
DESPITE the recent EU referendum decision and the uncertain economic challenges it has served up, the Northern Ireland hospitality sector still faces a bright future. With more top quality hotels and award winning restaurants being established all the time, along with a host of coffee shops and bars, the industry is continuing to be positively transformed.
At the same time, we're being recognised more and more on the world stage. With Belfast recently named the best UK city at the Guardian and Observer Travel Awards and Titanic Belfast named the top tourist attraction in Europe, we have much to celebrate. Signs of growth have been positive and the good news is that there is scope for more.
The ambition for the tourism industry here is clear and I suspect the outcomes of Brexit will not deter that. Tourism is currently worth 4.9 per cent of Northern Ireland's GDP, sustaining over 40,000 jobs and the aim is to double tourism's contribution to the economy by 2020. This means generating an additional 10,000 new jobs and drawing in 4.5 million visitors into Northern Ireland every year.
Some recent statistics from the Ulster University Economic Policy Centre, show the room for industry growth when compared to our near neighbours. In terms of tourism spend as a percentage of GVA, the current gap with the Republic of Ireland figures equates to £500 million for the local industry. When we also compare tourism employment as a percentage of total employment here with Scotland, this equates to a further 11,000 jobs in the sector. And that is just matching their achievements – why should our ambition stop there?
While the true impact of Brexit has yet to be established, or a clear time-line laid out, there will undoubtedly be change and uncertainty ahead. But there will also be opportunities. One of the early positive outcomes of the referendum decision for the local industry has been the depreciation in the pound, making the region even more attractive to visitors from other countries. This is likely to include a range of new visitors, who will sample our quality tourism product and our famous hospitality for the first time.
Northern Ireland's Year of Food and Drink 2016 has also provided an excellent platform to celebrate the strengths of our ‘good food' credentials – something which is an increasingly important ingredient in global tourism markets. With more large scale events such as the Irish Open coming to the north coast in 2017 followed by The Open in 2019 we have major upcoming opportunities to reach a global audience and to reinforce our strong visitor offering.
While we await the post Brexit economic environment to become clear, we are acutely aware of ongoing issues for the local industry. The current 20 per cent VAT rate in Northern Ireland compared to 9 per cent in the Republic of Ireland, is no doubt affecting many hotels' bread and butter business. There is still a need for the wider industry to raise its game so we can fully maximise the scale of the opportunity that exists and this may require closer co-operation and collaboration between members of the hospitality sector. We also face a challenge about spreading industry growth and investment across all parts of Northern Ireland to ensure a quality experience everywhere.
Despite these challenges, the focus should remain on innovation and investment for the future. In our own business, we are continuing to see a return in confidence and an appetite for investment. New hotel investments are progressing well with Bullitt, the latest hotel by the Beannchor Group due to open this autumn and the Europa's new sister hotel, Belfast Central, well under way. This investment is not unique to Belfast however, as our recent support for the Bishop's Gate Hotel in Derry suggests.
Despite the new economic realities brought about by Brexit, we remain excited about the prospects for the industry and are committed to working closely with our customers and the wider hospitality sector to help realise its full potential.
:: Hospitality Exchange, organised by Northern Ireland Hotels Federation, takes place on October 18 & 19 at the Ramada Plaza Shaws Bridge. Brian Gillan, head of business & corporate banking at First Trust Bank, will be speaking at the business breakfast on Wednesday October 19. Tickets for all events can be booked online at hospitalityexchange.co.uk