Up to 90% of pubs in Belfast could be at risk as tenants face rent demands and landlords in turn come under pressure from banks.
The hospitality sector will be shut until at least early March.
Drink-only bars have had less than four weeks to trade during coronavirus lockdowns since last March.
Many tenanted pubs were able to negotiate rent breaks or discounts for at least some of last year. And while grants and loans have been available, there is still fear for the future, even when trading resumes.
One Belfast publican said he had been paying on average 40% of normal rent for most of last year after negotiations with his landlord.
His business was due to pay full rent again in April this year but he was concerned about how he would make payments with no date yet for reopening.
In most cases, amounts saved in breaks and discounts have to be repaid in future.
A provision in the Coronavirus Act 2020 protecting businesses unable to pay rent due to the pandemic from eviction expires at the end of March.
John Bittles, owner of Bittles Bar in Upper Church Lane in Belfast, said he had so far been able to keep up with the rent, with funds from his Christmas 2019 trading and a government-backed Bounce Back Loan. But he added: “Really we’re looking at the possibility now where we mightn’t be open until May, so we have February, March, April to think about. I’m in the process of going to my landlord to say, I may not be able to pay this.”
In a Zoom meeting last month between politicians and business owners, a pub landlord described giving tenants discounts and deferrals while still having to repay their own loans. He said his bank advised him to instruct tenants to apply for the government-backed Coronavirus Business Interruption Loan Scheme.
He told the meeting: “We’re now at the end of our cash surplus and we’ve nowhere to turn. Having done the right thing earlier in the year, we’re having to go back to the same people and start demanding money.”
One hospitality entrepreneur warned 80 to 90% of city centre pubs were at risk because even when trading resumes, many will not be able to afford to catch up on their unpaid rent.
If a publican was faced with extra rent to pay over the last few years of their lease, that could prompt them to walk away.
He added: “A lot of bars might say there’s no way we can do that and pull the plug. The tenants are not having those conversations yet but it will happen when bars start trading and that’s going to be a serious problem for 80 to 90% of bars in the city centre which could be at risk in future.”
He said the onus was on the UK government to bail out the industry.
“I know for me it’s a matter of having to duck and dive and try to work out different agreements with various landlords — some of whom are mortgaged to the hilt and haven’t had any respite themselves.”
Colin Neill, chief executive of Hospitality Ulster, said many landlords here were retired publicans themselves. He said the UK government should consider a crisis fund. “The NI government doesn’t have firepower to deal with this.”
He said more restaurants than bars were at risk, as at around 90%, a greater percentage of restaurants in Belfast were rented, compared to 40% of bars.
The Department for the Economy has launched support for wet pubs, unable to trade for most of the last 10 months. It said: “The first payments from the Wet Pubs Business Support Scheme issued on January 20 with a value of circa £70,000.”
A spokesman for Ulster Bank said it recognised “the significant challenges” facing the sector and was supporting customers “with appropriate forbearance”.
It said it was using the CBILs and Bounce Back Loan Schemes.
Bank of Ireland said it had a range of supports available for customers.
East Londonderry Sinn Fein MLA Caoimhe Archibald, chair of the Assembly’s economy committee, said: “It is important that banks offer flexibility and support to those businesses which are impacted by ongoing closures to help them recover once the restrictions are lifted.
“In planning the economic recovery from Covid-19 there will need to be practical and financial supports for businesses to help them adapt to the new environment, the Economy Minister and Invest NI must ensure appropriate support is made available including to our pubs which play a key role in supporting other sectors, not least to tourism.”
The Department of Finance said it had now issued nearly £124m to over 11,300 businesses under its Localised Restriction Support Scheme (LRSS) which is supporting businesses which have had to close since lockdowns introduced from October.
It said: “Further payments will be automatically given to eligible businesses to cover additional periods of restrictions.”