Business

Hospitality firms struggling to keep the doors open amid spiralling costs and staff shortages

Hospitality Ulster has warned more businesses are struggling to keep their doors open due to spiralling costs and staff shortages.

HOSPITALITY businesses around the north are struggling to remain open due to spiralling costs and labour shortages, a trade body has said.

The annual general meeting of Hospitality Ulster heard on Tuesday that many bars and restaurants have responded by closing their doors on a number of days during the week.

The warning came just days after award-winning south Belfast ramen restaurant Bia Rebel announced the closure of its Ormeau Road outlet citing “insane price hikes”.

Hospitality Ulster chief executive Colin Neill said many more businesses have reported their struggle to remain open due to rising costs of energy and raw materials, as well as a lack of staff at all levels.

“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,” he told the AGM.

Tony O’Neill of Cathedral Quarter restaurant Coppi, who is entering his second year as chair of the trade body, 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 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.”

The long-running issue over the disparity of VAT for hospitality firms in the north compared with their southern counterparts was also high on the agenda of Tuesday’s AGM.

VAT for UK hospitality businesses, which had been cut to as low as five per cent during the pandemic, returned to 20 per cent in April 2022.

The Republic’s 13.5 per cent rate for hospitality was cut to nine per cent in November 2020. The temporary reduction has been extended until February 2023.

“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,” said Colin Neill.

“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?”

Hospitality Ulster said the industry needs a restored executive to bring forward a dedicated hospitality strategy to find practical policy solutions

Vice-chair Stephen Magorrian of the Horatio Group, said: “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.”

Enjoy reading the Irish News?

Subscribe now to get full access