The warning came at the trade body’s AGM in Belfast coupled with the fact businesses are already having to make tough decisions in a bid to ensure their futures.
The meeting heard some premises have been forced to close for a number of days of the week due to staff shortages and to give colleagues extra rest days.
VAT disadvantage
Other significant issues included the high rate of VAT at 20%, which puts businesses at a significant disadvantage when competing in the tourism market with the Republic of Ireland, where VAT is 9%, and high business rates.
Delegates also discussed the need for the government to bring forward a dedicated hospitality strategy to find practical policy solutions and support for the problems that can be dealt with at a local level.
Neill said: “The stark reality of the hospitality landscape was laid bare as members voiced real concern over the future of the sector moving forward.
“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.”
Bounce back dashed
Neill continued: “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.
“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?
“We are working to provide workable solutions to these looming issues, and despite the lack of Executive and Assembly, it is important that our elected representatives be live to the challenges and engage the sector on what actions can be implemented. This starts with a hospitality strategy that can help resource and support the industry get back on its feet, and properly work to regain its position as a £2bn a year sector.”
