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New Covid-19 support welcomed for tourism & hospitality

Janice Gault, chief executive, Northern Ireland Hotels Federation.

A new £26.1m Covid-19 support scheme for larger hospitality and tourism businesses and additional £4.1m scheme for tourist accommodation businesses, announced yesterday by Economy Minister Diane Dodds, have been welcomed by sector representatives.

The Large Tourism and Hospitality Business Support Scheme (LTHBSS) will provide financial support to help operators in the sector meet fixed costs and overheads associated with the survival of their businesses and the protection of jobs.

The Bed and Breakfast, Guest House and Guest Accommodation Scheme, meanwhile, opens on January 28 and will aim to support around 900 businesses.

“This is a real lifeline for the sector and shows an understanding of the difficult situation that the sector finds itself in,” said Janice Gault, CEO, Northern Ireland Hotels Federation.

“Since the start of the pandemic, assistance for larger tourism and hospitality businesses with a significant fixed cost base has been limited. These businesses were not accounted for in the initial grant phase as their NAV level of in excess of £51,000 meant that they were not eligible.

“The Federation has repeatedly made the point that a closed hotel operation still attracts considerable cost. Hotels are burning through £2m to £2.5m per week which does not include furlough costs (£25-£30 per week per employee) or any bank repayments.

“Trading over the last year has been limited with reserves now severely depleted and businesses operating in survival mode. The industry will need additional support in the coming months and the Federation continues to engage with Government to find appropriate solutions.

“The effects of the pandemic have lasted much longer than originally predicted and our members see these continuing well into 2021. This year will be all about reopening, with full recovery and restoration now likely to be in the 2022-23 timeframe. At the moment, hotels remain closed and with the current health crisis, travel restrictions and level of community infection, reopening appears to be some way off.

“Throughout this crisis, the industry has traded responsibly adhering to government guidelines with an emphasis on protecting the health of staff and customers. While hotels are looking forward to reopening when the correct circumstances prevail, a viable trading framework needs to be in place and the threat of another lockdown off the table. Everyone appreciates that we are in unchartered waters but setting out a regulatory base which effectively results in businesses trading in an unstainable manner is simply not an option.

“The Federation continues to press for measures to ensure the industry can reopen in a sustainable manner. The asks are for the current 5% VAT rate to be held until businesses recover, Full Business Rates relief for 2021-22 and that a grant is given to assist with the considerable cost of reopening. Hotels are still counting the cost of the short Christmas trading period and reflecting on the challenges that 2021 will bring.”

Colin Neill, chief executive, Hospitality Ulster, said: “This is very welcome news for a vital part of the hospitality sector that has had to wait for a significant period of time to be supported financially, despite being some of the biggest and best-known hospitality venues we have here.

“Although this is over £26m being announced today, this will be allocated to as many as 278 hospitality and tourism businesses across Northern Ireland based on NAV and will go towards the fixed overheads of large buildings that are considerable, even when closed. We need to ensure that these mothballed businesses stand some chance of opening again, as many have not been eligible for other support packages to date.

“With the extension of the lockdown being announced for a further four-week period – which this financial aid will not cover – we now have to work with the Executive to make sure that there is a continued level of financial response for this new timeframe. The issues don’t go away.”

“We will also continue to press for payment of outstanding grants and support for those businesses that have fallen through the funding gaps.

“It is also good to see the launch of the £4.1m Bed and Breakfast, Guest House and Guest Accommodation Scheme by the Department for the Economy to support tourist accommodation businesses severely impacted through reduced income due to Covid- 19. We would encourage all those eligible to apply at the end of the month when the scheme opens.

On the extension to the lockdown until 5 March 5, Neill said: “Unfortunately the extension to the lockdown announced this afternoon comes as no surprise. The longer this lockdown goes on for, the more costly it becomes for the hospitality industry, especially when our lockdown calendar shows that we have now broken through the 300-day mark of being under severe restrictions or zero trading.

“Whilst another six weeks might see a short space of time in the grand scale of the pandemic, it will be the difference in some deciding never to open again, not because they have run out of patience, but because they have run out of money trying to make it through. Business owners can’t wait around forever, especially when they have families to feed and mortgages to pay.

“This is such a struggle for the entire industry and we now must work towards the start of March to make sure the industry led recovery plan is in place, backed and wholly funded by the Executive. Now is not the time for sitting back, this is the right time to be focused on economic recovery led out by the hospitality sector.”

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