How is Brexit affecting our Hospitality Sector?

The exact outcome of Brexit is both unknown and unpredictable. We are surrounded by uncertainty. There are a variety of factors which pose huge threats to our industry; the stand still of wage growth being one of the biggest worries surrounding Brexit where the hospitality sector is concerned. But, to what extent is Brexit having an impact on the hospitality sector in NI at the moment?

Tourism contributed a record-breaking £926 million to the Northern Ireland economy in 2017 with plans to grow overseas tourism revenue to £623 million this year, driven by more than 2.3 million overseas visitors. Therefore, overseas visitors are pivotal to future success and anything that effects this consumer confidence is a concern.

As the hospitality industry here is already facing a severe staff shortage, access to foreign labour is vital for future sustainability. Northern Ireland has already experienced a drop in EU workers of 26% since the Brexit Vote and protecting these people, many of whom our sector relies heavily upon is crucial.

As a result of Brexit uncertainty, the number of EU citizens applying for jobs within the industry is rapidly decreasing. As an industry, we need to work harder to train and recruit from within Northern Ireland. Be that within our education systems as well as within our Hotels & Restaurants on an ongoing basis.

Having said that, ultimately there are not enough people to fill our current and indeed future predicted job vacancies, with independent reports predicting our hospitality industry will need an additional 2,000 chefs by 2024. Therefore access to skilled and soft skilled labour forms an integral part of the final Brexit deal.

Additional and more extensive training for our staff wont come cheap. With the added burden of uncertainty around EU workers, our Hospitality business owners simply cannot afford to lose these valuable members of staff and potential staff post-Brexit.

However, on a more positive note Brexit could open the door to lower VAT for our Hospitality Industry. The 9% rate which has been in the South has provided a solid operating base for an industry, which contributes in the region of €9bn to the Republic of Ireland’s economy.

Northern Ireland Hotels Federation boss Janice Gault said that while EU rules around taxation currently prevent the UK from altering VAT in one region, things could change following Brexit. The latest independent research shows that more than 12,000 jobs would be created across accommodation, visitor attractions and food if the VAT rate was cut to 5% according to Colin Neill, Hospitality Ulster.

So with a deal or no deal scenario looming and a leave date in sight, there is no doubt our industry faces difficult challenges particularly in relation to a shortage in skilled labour which is hampering us in keeping up with a rapidly growing tourism trade.

So, what does the industry need to do? Looking ahead, our sector can continue to grow, create further employment opportunities and contribute to the NI economy. However, to reach our full potential – whatever deal or no deal we end up with – we must take action immediately to address these issues.

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