National Living Wage will shut NI hotels, industry spokesman warns

Some hotels and restaurants will close because they cannot afford to pay staff the National Living Wage, a hotel industry spokesman has warned.

Many employers will have to increase salaries when the new £7.20 an hour measure comes into effect next April.

Ciaran O'Neill, Northern Ireland Hotels Federation president, said it posed a major challenge for the entire sector.

"The biggest cost in any restaurant or hotel is people," he told the BBC's Inside Business programme.

Announced by Chancellor George Osborne in the Budget, the compulsory National Living Wage will be paid to both full-time and part-time workers aged 25 and above.

Initially, it will be set at £7.20 an hour, with a target of it reaching more than £9 an hour by 2020.

Mr O'Neill said: "We will have to rise to it as an industry and deal with it, because the train isn't stopping.

"If you introduce the living wage at the scale that the government is talking about until 2020, that is going to put a lot of restaurants, in particular, out of business because they can't afford those wages."

Inside Business is available on the BBC iPlayer.