Spiralling energy bills are forcing hospitality businesses to raise prices and cut trading hours, according to a new survey from four UK trade bodies.
It revealed 76 per cent of businesses are mitigating spiked energy costs by reducing gas and electricity usage and raising prices – while 38 per cent have cut trading hours.
The survey revealed one in ten hospitality businesses are seeing staggering energy increases of more than 200 per cent, and that over half (55 per cent) of businesses that attempted to renegotiate energy contracts had been refused.
More than a quarter (26 per cent) said they were unable to get a quote or a reasonable quote from an alternative supplier, while a third were told the energy company was not supplying to the hospitality sector.
The results are from a joint poll by UKHospitality, the British Institute of Innkeeping (BII), the British Beer and Pub Association (BBPA) and Hospitality Ulster.
The questionnaire received over 300 responses from businesses operating 6,000 venues – with 79 per cent of respondents owning three or fewer sites.
Reacting to the findings, the group said: “These astonishing energy price increases are 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.”
They described having to hike prices while trying to tempt customers back to venues alongside being forced to open late or close early as “truly punishing”.
Unlike households, businesses are not protected by the consumer price cap – which has so far shielded energy users from record wholesale costs.
Elevated energy costs are the latest hurdle for the hospitality sector as it struggles to recover from the pandemic, alongside impending business rate rises, rent increases, chronic staff shortages and rising raw goods costs.
There is also the prospect of a return in April to 20 per cent VAT for the industry, with Chancellor Rishi Sunak set to deliver the Spring Statement later today.
Commenting ahead of the statement, the four bodies said: “It is imperative the government takes action to support the sector – by extending the reduced rate of VAT beyond April 2022 and working with the sector to ensure that supply is guaranteed and that cost pressures are mitigated.”