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How Have Soaring Energy Prices Affected Pubs, Hotels and Restaurants?

Posted by Sidney Phillips on 30th December 2021 -

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It has been well publicised that energy prices are on the up, increasing operating costs for pub, hotel and restaurant operators across the UK. Are we stuck with it? Or is there a solution?

News that energy prices have soared in recent months due to worldwide shortages of gas and energy supplies has been in the limelight recently, with domestic energy bills up 12% since the start of October 2021. According to regulator Ofgem, this is likely to further increase with the price cap (a backstop protection imposed by the Government) set to go up again in April 2022.

These increased costs are expected to put further strain on the Leisure & Hospitality sectors with other operating costs also increasing, including fuel and delivery costs, product costs and the National Minimum Wage.

Many have suggested that, like with the various grants and loans available to the sector during the Covid-19 pandemic, the Government step in with further financial support to ensure the survival of business and the retention of tens of thousands of jobs. But does this one size fits all solution really fix the problem?

We put this question to Robert CockayneSidney Phillips' Regional Valuations Manager for London & South East, who commented: “Unfortunately not. What we need to remember is that Covid-19 hasn’t simply disappeared. Although a large proportion of pub, hotel and restaurant operators are back to pre-Covid trading levels or greater, the knock-on effects are still lingering in the background with loans and rental debts still needing to be repaid. Further loans are only going to create further debt, and if we were to enter into a Plan B, C or D scenario this Winter, this will only get worse."

"A more pragmatic approach would be for the Government to consider further tax relief to operators. A temporary reduction in Business Rates, to say 50% for a period of 12 months, would greatly assist many operators in offsetting this saving against their soaring energy costs. Those smaller businesses who are already exempt from Business Rates could be offered grants as an alternative."

Surprisingly, with a number of energy suppliers now having gone bust, the market remains competitive and there are deals to be done to get the best energy tariff. Utility Helpline, a specialist and award-winning energy broker and advisor to the Leisure & Hospitality Sector, are still obtaining competitive prices from over 35 suppliers, including those which you would not necessarily consider if shopping around for yourself. This includes water suppliers as with the water market now deregulated in England and Scotland, you can switch to find the best deals.

For those operators conscious of their carbon footprint, a number of suppliers are now offering green solutions to energy supply in order to aid in meeting the Government’s 2050 Net Zero target. Renewable & Green energy provides a clean, safe low-carbon alternative to fossil fuels (coal, oil and gas) which produce carbon dioxide, the main cause of climate change. Most key suppliers now offer some form of green or greener energy from several renewable sources:

  • Solar Energy (Converting the Sun’s energy into electricity and heat through solar panels)
  • Wind Power (Sourced from onshore and offshore wind farms)
  • Hydropower (Harnessing the energy in flowing water such as rivers and dams)
  • Biomass (Natural materials are turned into gas to provide energy)
  • Geothermal (The natural heat of the Earth is used to produce energy)
  • Green Gas – This is made through turning organic matter into biomethane

  •  

A Carbon Footprint Audit from companies such as Utility Helpline can help you identify what areas of your business have the most impact and how you can address this and save money in doing so. For further information on going green or how to find the best energy deals for your business, contact Utility Helpline on 0800 043 0423 or visit their website - Utilityhelpine.co.uk.


Ceiron griffiths

The Specialists in Licensed Premises Sales.

Link to Sidney Phillips business profile

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