Hospitality ‘On the Brink’ says Sector Leaders

Escalating energy costs are pushing hospitality businesses ‘to the brink’ with some operators already facing up to a 500% increase in energy prices.
Operators are have once again called for ‘urgent’ help following Ofgem’s announcement of its increase in the energy price cap last week.

The price cap – the maximum amount an energy provider can charge for default tariffs – will come into force on 1 October. It means a typical household in the UK will face energy bills of around £3,500annually.

The price cap does not apply to businesses, but is having a knock-on effect, the trade bodies warned.

Uk Hospitality COE Kate Nicholls has warned up to 10,000 sector businesses could close permanently in the next 18 months as energy costs bite. An estimated 500,000 hospitality jobs could go 300,000 directly employed and 200,000 among suppliers.

Many businesses are talking about reduced hours or temporary winter month closures to reduce costs.

Ms Nicholls said:
“Without government support the hospitality industry will see a catastrophic loss of businesses. Based on our experience of covid, we can expect the closure of around 10,000.” Hotelier Freddie Hitchcock, who runs four sites, reported his energy bill is due to increase from £265,000 a year to £1.2m. An unnamed pub owner told the Sunday Times his utility bill across 20 sites is set to increase from £500,000 to £2m.

Adding: “While the energy price cap doesn’t apply to businesses, this steep rise for already cash-strapped consumers means they’re likely to cut back on visiting hospitality venues or, worse still, stop going out altogether.

“Higher energy prices also affect our sector’s employees, who now face even higher energy bills.

“Without an urgent and comprehensive government support package that helps both households and businesses, many hospitality venues are contemplating reduced trading, resulting in lower wages or lost jobs for staff who need their jobs more than ever if they’re to heat their homes.”

Meanwhile, hundreds of independent takeaway owners have written to the government and both Conservative leadership candidates to plead for support in the wake of soaring energy bills and rising costs. In an open letter backed by the British Takeaway Campaign, the body that represents the nation’s independent takeaway industry – more than 750 restaurant and cafe owners have urged the government to take immediate action to ensure they’re able to keep their doors open.