Time to back a sector which generates cash for the economy
I was dismayed last week to hear that three fine restaurants are closing due to the challenges from spiralling costs and the problems being experienced by people everywhere. Every week seems to bring more depressing news for our hospitality sector.
The latest restaurants to pull down the shutters are Sooty Olive in Derry, Clenaghan’s at Aghalee and Broker in east Belfast and They were all excellent establishments that added much to the sector especially in terms of creative dishes.
Many others have already closed, some without any publicity because of a crippling cocktail of higher costs from energy, business rates and staffing. In addition, VAT continues to be another serious problem for the companies. Consumers also have less money to spend and, as a result, are not eating out as much. Among earlier closures was EIPIC in Belfast, once one of our most acclaimed Michelin star eateries.
I fear there are likely to be more closures in the months ahead. We all know what the sector needs – action on rates, help with VAT and staffing. Restaurants in Britain have discounted rates of 75 percent and in the Irish Republic VAT is lower than it is here.
Restaurateurs, including many in our successful Taste of Ulster scheme, tell me it’s harder now than ever to make an acceptable income in the sector. Margins are wafer thin. Many have invested heavily over the years in great food, quality services and superb facilities for local diners and visitors from abroad. They are a vitally important component in our tourism marketing campaigns.
We all know the huge contribution tourism makes to the economy. It’s widely acknowledged in the ‘corridors of power’ what is needed to accelerate the growth in tourism to help in regenerating our economy.
Research shows that tourists are significantly influenced by the availability of great food and drink when looking for a holiday destination or a short break. In Northern Ireland, however, the options for potential visitors…and locals, are being reduced because of a continuing failure to accord the hospitality sector the support and recognition it certainly deserves. It’s not seeking handouts but wishes support that will enable it to continue to contribute to the local economy.
Hospitality is, after all, our fourth largest private sector employer and has a turnover of £2bn. Our £5bn food and drink industry also depends on business with hospitality. The hotel sector alone has invested more than £1bn over the last two decades, with the potential for a further £300 million to be invested by 2025.
I acknowledge that the Northern Ireland Executive is facing financial demands from every quarter and hasn’t a big enough budget to cover everything. Greater consideration, however, of the needs of the hospitality sector would make good sense, because it would be one of the fastest ways to generate revenue for the economy from the individual businesses, their employees and suppliers in the local food and drink sector. The Restaurant Association of Ireland estimate that every closure costs takes £1.3m out of the economy, a stark reminder of the impact that shutting restaurants has.
