New UU report on the impact of the cost of doing business reveals a 'bleak picture' for the NI economy

Chief Executive of Hospitality Ulster, Colin Neill, has raised concern about the increased costs of doing business which leaves businesses in a bleak position.

It comes as the Ulster University Economy Policy Centre’s report on the impact of the increased cost of doing business on the economy has revealed hospitality as one of the sectors struggling the most.

The report that was conducted in December 2022 points out that turnover in the hospitality sector is up 10 to 20% on 2019 levels, but profitability has plunged by 50 to 60% as businesses are still repairing the damage of prolonged lockdowns.

Energy, cost of living pressures on households, cost of food and staff are all highlighted as formidable barriers to profitability for hospitality businesses, meaning that pubs, cafés and restaurants have been left to plan for two bleak scenarios, either break even or tackle the question of how much they can absorb.

Colin Neill, chief executive, Hospitality Ulster, said: “The Ulster University Economy Policy Centre’s report on the impact of the increased cost of doing business on the economy has revealed a bleak picture for the economy here in Northern Ireland, particularly for our hospitality businesses.

“I am under no illusion that every corner of our economy is suffering at present, and the cost of doing business has no doubt exacerbated the volatile economic situation we are all in. However, to see the hospitality sector revealed as one of the sectors struggling the most is deeply concerning. The hospitality sector is the fourth largest private sector employer in Northern Ireland, and it is our fantastic hospitality businesses that position Northern Ireland as an optimal location to live, work and play – this is something that is easily forgotten”.

“Businesses are not in a position to invest for growth, a scary place to be in for a sector that has a focus on the changing demand for customers. Hospitality is also a sector that is least able to pass on the increased costs in price increases to customers.

“In light of this bleak report, we need the Chancellor to address the budget deficit in Northern Ireland’s finances as a matter of priority in his Budget next week. Particularly during this time of political limbo, we need to see the Chancellor deliver some good news and offer hope for the business owners who are working tirelessly to keep their businesses afloat and look after their faithful and loyal customers who have helped this sector weather tremendous challenges and uncertainties to date.”