Hospitality venues cut opening hours due to spiralling energy costs

Rising energy costs are forcing some hospitality businesses to cut trading hours and raise their prices, a new study has warned.

One in 10 operators are seeing energy price increases of more than 200%, according to a joint poll by trade bodies UKHospitality, the British Institute of Innkeeping (BII), the British Beer & Pub Association (BBPA) and Hospitality Ulster.

The poll received over 300 responses from businesses operating 6,000 venues, which are members of the four organisations. Of the companies that responded, 79% had three or fewer sites.

Some 76% said they are tackling rising costs by reducing their gas and electricity usage and raising prices, while 38% have cut their trading hours.

The 12% of businesses who said they were seeing little change in energy prices are likely to be on fixed contracts.

Of those who had tried to renegotiate their contract, 55% had been refused, and 26% said they were unable to get a quote or reasonable quote from an alternative supplier, while nearly a third were told the energy company was not supplying the hospitality sector.

Responding to the findings, UKHospitality, the BII, the BBPA and Hospitality Ulster 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.

“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.

“It is imperative that 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.”

The Caterer previously heard from hospitality operators who were struggling with rising energy prices and difficulties finding a supplier. The BBPA has estimated increased energy prices will add costs of £800m to the sector this year.

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