Business

Hospitality calls for full May 17 reopening as operators fear a fifth won't survive

The scene outside a closed pub in Derry city centre. Picture: Margaret McLaughlin
Gary McDonald Business Editor

OPERATORS in the north's hospitality sector are demanding a guaranteed reopening date and adaptions on social distancing and household numbers as one in three will be unable to cover their costs or be viable under current rules.

Four in five also admit they won't return to profit until 2022 or later, leaving the remainder unviable under current or anticipated trading.

And when asked about the prospects for the eating-out and drinking-out market over the next 12 months, they are split in terms of confidence, with 33 per cent optimistic but a full 46 per cent pessimistic.

The findings come in a survey carried out by market measurement, data and research consultancy CGA in association with Hospitality Ulster, which took the views of 273 operators in bars, restaurants, hotels, wedding venues and nightclubs.

They share a general concern at the future of the sector, which has seen thousands of people either furloughed or made redundant since the first lockdown was announced 14 months ago.

Respondents say access to funds could be a factor in the viability of venues, with 22 per cent of business grant value yet to be received by operators.

Three in four operators plan to open their venues as soon as permitted, with a further 21 per cent planning to do so within a month of a date being announced.

And they say a key element of future government support must be an extension of the 5 per cent VAT rate and a full business holiday for 2021/22, with more than a quarter also citing a cut in alcohol duty.

Hospitality Ulster chief executive Colin Neill has called on the Executive, ahead of its meeting this week, to examine the evidence and research available to bring forward the reopening date for the entire hospitality sector to next Monday (May 17).

The organisation has also stated that the ‘Rule of 6' and a review of the social distancing rules must be considered as a priority.

He added: “The sector needs to reopen now and has been working towards this phase for some time with track and trace systems in place and covid secure environments as standard. There is also clear demand from customers, so we need to see the Executive be responsive to that for the sector to benefit after an awful year.

“As we move forward, our Executive and those in charge of setting the rules and guidelines on how we reopen, must consider the implications of the decisions they are making on the businesses that make up the hospitality sector. Although Northern Ireland now has a reopening roadmap for hospitality, it still lags behind that of the other three nations, both for outdoor and indoor trading.

“Reopening hospitality with restrictions that are economically unsustainable is reopening in name only. With England already using the ‘rule of 6' for table numbers and a scientific report on social distancing due in June, the Executive must now look to the end of social distancing in Northern Ireland.

“If the same level of restrictions and social distancing continue here, despite what the evidence is showing, then the Executive must step in and provide compensation or hospitality businesses will not survive.”

Ted Mulcauley, CGA senior insights consultant added: “Research across the UK shows that Northern Ireland lags behind in terms of moving through the phases of its reopening roadmap.

“Our latest survey shows there remains a level of pessimism about the viability of businesses in hospitality and that casualties will occur if elements such as social distancing and household numbers aren't changed.

“It's clear that even though the sector in Northern Ireland is slowly beginning to reopen, a return to profitability is some way off in the minds of those operators who responded to the survey and could take more than a year of hard work before they see any benefit.”

“Looking at CGA's Northern Ireland on premise measurement service, we see for example that beer sales alone fell £199m in 2020 compared to 2019, equivalent to a drop of 63 per cent, highlighting the devastating financial impact of Covid-19 related trading restrictions.

“With progress being made in other parts of the UK, there is an argument to be made that Northern Ireland could accelerate the reopening of the entire hospitality sector.”

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