Rates hike 'would have put my hotel into loss-making territory - other people's businesses would have closed'
A major publican has said that the rates hikes which were threatened would “definitely” have shut the doors of some bars, and would have left his hotel losing money.
Stephen Magorrian has three businesses under the umbrella of his Horatio Group (of which he is the managing director): Horatio Todd's pub in east Belfast, The Northern Whig pub in the city centre, and Denvir's Hotel in Downpatrick.
He employs about 100 people, around 70 of them full-time.
The rates increase was revealed last week, but has since been halted by finance minister John O’Dowd.
Mr Magorrian said that the rates hike would have seen bills increase by 70% and 60% respectively at the pubs (about £1,500 and £1,200 per week), and would have rendered Denvir's "loss-making".
"Obviously we'd have to look at where we could cut costs," he said.
"We'd have to pass on some of it in price rises... we've been hit with increased National Insurance contributions, increased minimum wage, a duty increase - we've increased our prices quite a few times.
"Would that have an impact on footfall and spend? I think it probably would."
His venues would have had to cut staff hours and halt recruitment, but would have remained open.
"We've been around quite some time," he said.
"For other pubs who maybe aren't as mature as us: definitely not sustainable…
"Definitely some businesses would have closed, without doubt.
"I had some of them on to me, one lady in particular in tears."
He said the move to halt the hike was "very brave," adding: "All credit to the minister."
Unlike other businesses, pub and hotel rates bills are calculated based on their turnover, not the value of the floorspace they rent.
It is thought that this is a reason why pubs and hotels saw especially steep rate rises; the last rates evaluation was done in pandemic-hit 2021 and turnover since recovered dramatically, whilst at the same time profits have been squeezed by inflation.
DUP MLA Phillip Brett dubbed the use of turnover to calculate rates a "nonsense position", and called for all rates to be based on floorspace.
Mr Magorrian said that Mr Brett has not "thought deeply enough" about it, saying that while it may work for cities, it could hurt rural venues which have larger floorspaces.