Half of hospitality businesses may reduce investment and staffing
AS we all gear up for Christmas, the busy shopping period, the season of staff nights out, family gatherings, and festive pints, it is worth remembering the cornerstone on which this whole season depends - the hospitality industry.
A recent survey conducted by Hospitality Ulster is showing that our pubs and restaurants, and the very pulse of the sector is under threat. Over half of hospitality businesses are poised to reduce investment and staffing levels, with business optimism in Northern Ireland having plummeted to 22 per cent this quarter.
While almost 70 per cent of operators have increased their menu prices, over half have not passed on the full cost of increases in food and drink supplies to consumers. The delicate balance between delivering quality food and drink and overburdening customers with price hikes is a high-wire act that cannot be sustained indefinitely.
Our survey also found that energy prices, unsurprisingly, have emerged as a significant worry for most hospitality operators who are grappling with an average increase of 41 per cent in monthly bills. In an industry driven by tight margins, such surges in operational costs are unsustainable.
What’s worse, more than 15 per cent of businesses have admitted that they are facing the prospect of closure within the next 12 months.
While the current situation is bleak, it is not irreversible. On Wednesday, the Chancellor will have an opportunity to offer businesses across Northern Ireland with a much-needed early Christmas present in the form of business rates support and a VAT reduction. This is something that our members have highlighted as the lifeline they desperately need to weather this protracted storm.
Not only are these businesses embedded in the fabric of our communities and more than just establishments, but they are also the economic engines that fuel growth and investment. Our plea is clear: without prompt and substantial support, the very survival of our pubs and restaurants, which contribute immeasurably to our economy, hangs in the balance.
Hospitality Ulster will continue to make representations to government on behalf of our members. In the meantime, we await some good news from the Chancellor tomorrow to prop up businesses for the upcoming Christmas trading period.
:: Colin Neill is chief executive of Hospitality Ulster