Energy price hikes hitting hospitality

Some hospitality businesses are having to raise their prices and cut trading hours in a bid to counter soaring energy costs, an industry survey has found.

The joint poll by trade organisations UKHospitality, the British Institute of Innkeeping (BII), the British Beer and Pub Association (BBPA) and Hospitality Ulster revealed that 76 per cent of businesses are mitigating skyrocketing energy costs by reducing gas and electricity usage and raising prices. Close to two-fifths of those who responded to the survey have cut their trading hours.

Already struggling to recover from the effects of Covid-19, including lockdowns and restrictions on both staff and customers, the energy price increases have left many struggling. They also face business rate rises, rent increases, and rising raw goods costs on top of staff shortages.

The trade organisations describe the energy costs hike as ‘a cruel blow to the thousands of hospitality businesses across the UK desperately trying to rebuild and recover some of the losses they suffered during the pandemic.

‘That they should strike just as operators could see light at the end of the tunnel will be particularly painful – imagine having to hike your prices while trying to tempt customers back to your venue and being forced to open late or close early, with the subsequent loss in wages to staff. It’s truly punishing.’

They are calling on Government to support the sector more, including extending the reduced rate of VAT beyond April 2022.

The poll received just over 300 responses from businesses operating 6,000 venues, and which are members of the four organisations. Of the businesses that responded the great majority had three or fewer sites.

One in ten hospitality businesses are seeing staggering energy increases of more than 200 per cent. Those least affected, for now, tend to be on fixed contracts. But businesses are finding it difficult to renegotiate their contracts, with over half being refused. More than a quarter said they were unable to get a quote or a reasonable quote from an alternative supplier, with some energy companies saying they did not supply to the hospitality sector.