Comments from Lionel Benjamin, co-founder of AGO Hotels (www.agohotels.co.uk)
Energy – Soaring Bills
Q. How can operators secure favourable contracts, and manage costs effectively to maintain comfortable surroundings and control costs?
A. “The hospitality industry is currently facing huge costs as a result of growing inflation. When it comes to soaring energy bills, we believe businesses should appoint a specialist broker or advisor to ensure you are achieving the best possible pricing. Not only will this pay dividends in the long run but with growing ancillary charges – aside from the unit cost – expert advice can really add value. This is especially true in the present market, and we’d advise doing this before the upcoming October price review.”
“Costs Crisis” in Hospitality
Q. The Chancellor ignored sector and public calls to keep VAT at 12.5% in his Spring Statement, despite Parliamentary committee calls has worked on 25 EU countries who cut VAT as long back as 2010. What would you say to the suggestions and benefits of implementing a policy here, cutting VAT to at least until December 2023?
A. “I have been an advocate for a reduction in VAT for some time. Now more than ever hospitality requires a stimulus package, including a reduction in VAT, to aid in the recovery from the significant impact COVID-19 had on our industry. While the Government has indicated they are planning to take action, there is no time like the present to commence another phase of support for the sector through a comprehensive recovery plan for the next twelve months.
“Furthermore, we are currently experiencing a tightening in cashflow. Up until now, to maintain competitive pricing, businesses have absorbed inflationary pressures rather than increase their prices for consumers. However, as costs are escalating faster than they have in three decades, businesses have no option other than to pass these on.
Reducing VAT will allow some relief and will help to balance some of the cost of living pressures everyone is faced with.”