Almost 40% of operators cut trading hours to combat rising costs

22-Mar-2022 - Last updated on 22-Mar-2022 at 15:39 GMT

Truly punishing: 38% of operators cut trading hours to combat skyrocketing energy price increases (Credit: Getty/hit003)

Related tags Vat Legislation Energy costs Finance

Almost two fifths of operators have been forced to cut trading hours to combat cost increases across the board, according to a poll conducted by trade organisations UKHospitality, the British Institute of Innkeeping (BII), the British Beer and Pub Association (BBPA) and Hospitality Ulster.

The poll, which had 300 responses from businesses operating 6,000 venues, also revealed 76% of businesses were mitigating skyrocketing energy costs by reducing their gas and electricity usage and raising prices, while 38% have cut trading hours.

UKH, BII, 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.

Truly punishing

“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.”

Hospitality has faced average energy price increases of 95% as well as an expected increase in VAT, staff shortages, inflation, business rates and rent increases and debt, all while trying to recover from the Covid pandemic.

The poll also showed 1 in 10 hospitality businesses have seen energy increases of more than 200%, with those who have seen little change (12%) likely to be on fixed contracts.

Of those businesses which attempted to renegotiate their contract, over half (55%) had been refused, while a third had not tried to recontract.

Refused contracts

More than a quarter (26%) of operators said they were unable to get a quote or a reasonable quote from an alternative supplier, with nearly a third having said the energy company was not supplying to the hospitality sector.

Almost half of respondents (47%) said they were offered a contract, but the rate was too high; while close to a third who failed to get a reasonable quote were told it was due to them being in the hospitality sector.

The trade bodies added: “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 supply is guaranteed and cost pressures are mitigated.”