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Coronavirus: Economist warns of £400k blow to Belfast over St Patrick's shutdown

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St Patrick’s Day parade in Belfast city centre

St Patrick’s Day parade in Belfast city centre

Economist Esmond Birnie

Economist Esmond Birnie

St Patrick’s Day parade in Belfast city centre

Cancelling Belfast's St Patrick's Day parade could cost the city's economy around £400,000 and affect staff numbers, an economist has said.

Dr Esmond Birnie said that hospitality would be the sector hit hardest, with cafes, pubs and restaurants impacted.

And up to £75m could be lost if the city was shut down to tourists in a worst-case scenario for a month, he estimated.

Belfast City Council voted on Monday evening to cancel the parade.

Earlier Taoiseach Leo Varadkar had announced all parades and festivals in the Republic would not go ahead.

And on Tuesday a host of other local March 17 events were called off.

Dr Birnie said the loss of the Belfast parade, which draws tens of thousands of people every year, would come at a cost.

"If, say, 20,000 would have attended but don't now and they would have each spent, say, £20, that is 'a loss' of £400,000, but keep in mind most of these people will be of Northern Irish origin, unless a lot of people are going into self-isolation very quickly," he said.

"They'll still be spending money and most of that within the Belfast economy, so the actual loss to the local economy overall could be quite small."

On Tuesday, other St Patrick's Day parades were cancelled, including Londonderry, Newry, Downpatrick, Omagh and Enniskillen.

Stormont leaders also cancelled a St Patrick's trip to Washington DC. First Minister Arlene Foster and Deputy First Minister Michelle O'Neill are to remain here, missing a series of engagements in the US capital.

Dr Birnie said the main cost to businesses in the coming weeks will be through reduced tourist numbers and other visitors at events, including conferences.

He suggested Belfast could take a hit of up to £75m.

"Invest NI in 2018 suggested the total tourist and traveller economy was worth £2.5m per day to the greater Belfast economy," he added.

"So, if numbers of visitors fell to zero, an extreme case, and this lasted for a month, that would be the cost of £2.5m times 30 - £75m - but that is for just one month."

Employees are also to suffer as companies cut staffing levels following the cancellation of the parades and other major events across Ireland. Dr Birnie said he could see staff cuts becoming a reality.

"Sadly, yes, there are always some precarious businesses and something like this takes them over the tipping point," he added.

"That said, if the worst phase of the virus can be limited to a month or so, then much of the economy would bounce back subsequently.

"Also, look to what may or may not be contained in the Budget regarding measures to allow deferment of tax payments."

Director of employment law advice firm HR Team, Martina McAuley, said employers are moving to safeguard their businesses following the cancellations and the other events which are now at risk as a result of coronavirus.

"As a result of the St Patrick's Day parade cancellations and others, employers are considering their options on making cuts to staffing levels," she said.

"Notably in the hospitality sector, the cancellations have led many employers to look at whether they require as many staff or need to reduce employees' working hours.

"There are no statutory employee rights to pay in these cases, unless it is written into a contract of employment."

Ms McAuley said one option employers can consider is introducing short-time working for staff.

She added: "This is when an employee is placed on a reduced working week or is laid off altogether. Both of these measures are temporary solutions open to employers when there is a downturn in business such as is currently being experienced by many as a direct or indirect result of Covid-19."

She said that HR Team, which operates throughout Ireland and the UK, has had a surge in enquiries related to coronavirus.

"In light of the intensifying spread of coronavirus throughout Ireland in recent days, there are fears employers will suffer even greater losses as a result of cancellations in the coming weeks," she added.

"Advice is being sought on all types of incidences and potential situations that may arise regarding the impact of coronavirus on workplaces and workforces."

Belfast businessman Willie Jack, who owns the Duke of York bar in the Cathedral Quarter, said he was confident people will still go out on St Patrick's Day, despite the parade cancellation.

Mr Jack also owns the Harp Bar, the Dark Horse and the Friend at Hand whiskey shop.

"I'm not worried about the cancellation of the parade for my businesses as I think people will still go out," he said.

"I'm reasonably confident. I think the St Patrick Day's parade cancellation should be a public health call. I don't know if the cancellation of the parade was reactionary."

Hospitality Ulster has established an industry response group to monitor and support the hospitality sector in light of ongoing impacts.

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