Northern Ireland’s hospitality industry is “in limbo” as it awaits answers as to when it will be allowed to reopen following the current lockdown restrictions.
The industry has been one of the hardest hit throughout the coronavirus pandemic with some businesses only being open for a matter of weeks around restrictions.
There has been no indication from the Executive as to when restaurants, pubs and hotels will be allowed to open following the latest lockdown extension.
Colin Neill, Chief Executive of Hospitality Ulster, said he does not believe they will be allowed to reopen on March 5 when the current restrictions are due to end and that there will be some degree of restrictions for the rest of this year.
He said the industry was finding it “very tough” and they believe 30% of restaurants, 10-15% of pubs and 10-12% of hotels are at risk of not reopening.
“The general feeling is our industry will probably not reopen on March 5, [that is] what we pick up through intelligence and general discussions,” he said.
“We want to be open as quickly as possible but we would far rather if we have to delay for two or three weeks and then can reopen sustainably with less restrictions and to make us viable, that would be preferential because we can not do the open and close again or indeed open with so many restrictions that you can’t survive.
“The dialogue has always went, here’s what can open and here are your rules, we need to turn that on its head and say, here are the regulations, here are the rules, now who can open under that and be sustainable and who can’t and needs help.
“It is akin to the lifeboat brings you to a mile offshore and then chucks you in the water without asking if you can swim or not. We do need to change that dialogue and that can only be done if we have set up a proper working process to go with that.”
Colin was recently invited to join Westminster’s high level hospitality recovery board and said the same type of working group needs to be established in Northern Ireland to plan how the industry can safely open up again.
He said businesses here were “in limbo” and said opening up needs to be planned properly.
“Obviously everyone is focused on the hospitals and health and that’s right, but we are still in survival mode and we also need to start running parallel with that a recovery plan now because we can’t go on like this indefinitely,” he said.
“Forthcoming we’ll need assistance and we need to know what that assistance will be now so we can tell our banks to negotiate deals, because the banks are continuously looking for forecastings stuff.”
He added: “A hotel needs far more than two weeks notice for people to book, some people going to a restaurant might book tomorrow but your supply line is two to three weeks, you scale that up if you are going to a hotel and you need to start thinking now, people are starting to think now about where they are going in summer.
“If we have a plan now to know, those bookings then start to inform the financial position of the companies when they are talking to banks because they have hard bookings.”
Colin said the the industry in Northern Ireland is finding it “very tough” and although they are extremely grateful for the support that has come from the Executive, businesses are still having to pay £30 a week per member of staff to keep them on furlough, which is adding to the costs they are having to cover.
He said he knows of one business who is paying £33,000 a week in just that furlough contribution.
But he added it was important to retain the skills base to reopen.
He said: “It is very easy to look at us and say sure you are in the same boat as non-essential retail and everybody else that has been shut, but the underlying thing is our industry has been closed for longer or indeed open but heavily restricted so their reserves, if they have any left, are much further depleted than say non-essential retail.
“It is very easy to think they are all the same, they are not. Our guys are running out of cash, we have just done some modeling and we reckon if you take into account all of the help we have got, which we welcome, if you take it across the industry there’s probably about £100m, a quarter, which is the shortfall that the industry will have to fund themselves or borrow to fund.
“If you take it over the last year it is going to be in the region of £400m that the industry has had to either borrow or use their savings or whatever, so huge difference between what we are getting, which we are grateful for don’t get me wrong, but what we are getting and what it costs just to be locked down.”
Colin said the tragedy of the situation was the industry will not know until it opens up again who has been lost, they just won’t reopen again.
He added: “We have got high level data from the supply chain on their credit risk analysis, and it is the only way you can do it because no one is going to put their hand up and say I am bust, we reckon at risk of not reopening, you are looking at somewhere in the region of 30% of restaurants, 10-15% of pubs and 10-12% of hotels.”
Colin said hospitality businesses would need to be primed with a reopening grant as in many cases they could have exhausted all of their cash, be in debt to suppliers, and will have no money to pay their debts to get stock.
“If you have small suppliers who are owed money by us, they probably owe money to their bigger producers so to get all of that system clear we have to inject liquidity,” he said.
“It is all of those things. This can not just be seen as going, there’s dates to open everybody back up, that’s grand. There’s a whole support chain that needs to be regeared to get them open.”
He said it is down to whether the businesses have the money to do it and what conditions they are opening under so they can be financially viable.
He said serious dialogue was needed around this and we needed to keep the infrastructure together and start to plan.
“There is a future, it will be different, the industry has to look at that and how they adapt whatever the future is,” he said.
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