Tourism NI Survey Reveals Impact Of COVID-19 On NI Hospitality Businesses
According to Tourism NI, 79% of Northern Irish tourism and hospitality businesses that participated in an online survey conducted by the tourism development and marketing organisation coming up to Easter stated that the COVID-19 crisis will have a severe impact on their business in the short term (zero to three months) and 63% stated that the impact will be severe in the longer term (four months and over).
Tourism NI said that it received an unprecedented response to the survey from across the Northern Irish tourism and hospitality sector, with over 1,300 businesses and organisations taking part in it.
In addition to the above information, the survey's main findings include:
Business Performance And Cashflow
73% of businesses that have had any loss of business stated that "none" of it will be covered by their current insurance.
Cashflow and access to funding/working capital is a major concern for many businesses, particularly those with fixed overheads and no means of generating an income due to restrictions that are in place.
More assistance is being sought from banks and insurance companies, and many businesses indicated that they want business rates relief to be extended from three months to twelve, in line with the rest of the UK. A number of businesses said that they may not survive.
Workforce And Jobs
50% of the businesses that participated in the survey said that they have reduced staff numbers.
427 of the businesses surveyed indicated that they have furloughed workers, laid off employees with pay or made staff temporarily redundant. This amounts to nearly 9,000 full-time, part-time and seasonal workers.
Meanwhile, 418 businesses indicated that they have permanently laid off nearly 1,300 full-time, part-time and seasonal workers.
According to Tourism NI, this equates to approximately 50% of the job growth achieved across the sector in the last 10 years.
Access to Support
33% of businesses stated that they are not eligible for any of the three NI schemes as they do not pay business rates. 47% of businesses indicated that they are not eligible for the UK wide Coronavirus Job Retention Scheme as they do not operate a PAYE scheme.
55% of respondents are VAT registered and 67% pay business rates of some form and, therefore, should be eligible for some elements of the current UK government and NI business support schemes in place.
44% of respondents categorised themselves as being self-employed (447 of the businesses that took part in the survey), with 8% of these businesses stating that they have been operating for less than 12 months.
Eligibility criteria and/or a lack of understanding of eligibility was cited as a barrier to accessing support for a high number of businesses.
"Hit Hard And Hit Fast"
Commenting on the findings, Tourism NI chief executive John McGrillen said, "The biggest health emergency Northern Ireland has ever faced has also caused an unprecedented economic crisis, and within that our tourism and hospitality sector has been hit hard and hit fast.
"Our first thoughts must be with grieving families, people in hospital with COVID-19 or ill at home, and with the NHS staff who are working well beyond the call of duty to save lives. Yet, this pandemic is having far-reaching consequences for society, the economy and for tourism in Northern Ireland.
"The results of our survey confirm very clearly that COVID-19 is having a major impact on the tourism and hospitality sector, with significant challenges facing businesses relating to cash flow and working capital.
"The recent announcements on extensions to the Job Retention Scheme, Coronavirus Interruption Business Loan Scheme, £40 million of further NI Executive support for those businesses not currently supported by existing schemes and the opening of the Hospitality, Tourism and Retail Business Support Scheme are all welcome.
"It is clear, however, that further, ongoing support and guidance will be required to allow many businesses to survive.
"We intend to use the information collated through this survey to inform government considerations regarding current and future business support. We will also use this information to continue to reshape our own support to businesses, as well as inform the development of a sector wide response plan. This includes continued development of our new online COVID-19 business support hub and its dedicated support helpline, which has already advised hundreds of businesses in recent weeks."
© 2020 Hospitality Ireland – your source for the latest industry news. Article by Dave Simpson. Click subscribe to sign up for the Hospitality Ireland print edition.