‘This is far harder than Covid': hospitality struggles with energy bill support cut

11 April 2023 by
‘This is far harder than Covid': hospitality struggles with energy bill support cut

Hospitality operators are warning of "mass closures" with "harder times than Covid ahead" following a cut in energy bill support earlier this month.

The warning comes after the government's Energy Bill Relief Scheme, which provided £18bn to help businesses with rapidly rising costs, ended on 1 April. It was replaced with the Energy Bill Discount Scheme which has seen support cut to £5.5bn until April 2024.

MasterChef 2015 champion Simon Wood (pictured), who runs Wood Hospitality Group in Manchester, said he is currently facing energy bills as a high as £13,400 a month.

"That's where we are at - £13,400 last month for energy, that's £600 a day," he said. "Fundamentally, we cannot continue."

Wood, who already operates a four-day week in his restaurant Wood Manchester, added: "The margins are already so tight. I mean, it's £3.50 to buy a savoy cabbage."

He said that in the past week, four breweries in Manchester have had to close due to rising costs. "I'm seeing good people and their businesses going bust," he added.

The concerns are shared by fellow restaurateur Andy Lennox. The Bournemouth business owner said that one of the pubs in his portfolio had seen its annual energy bill rise from £18,000 to £87,000 at the start of the year. "Everything's on a knife edge," he added.

Lennox, who founded the Wonky Table Covid campaign group for over 1,000 venues in Bournemouth, Christchurch, and Poole, said "six to seven restaurants" in the area had been forced to close in the last few weeks due to the rising costs of energy.

Rick Cressman, owner of Warwickshire hotel Nailcote Hall, said the Energy Bill Discount Scheme only offered "derisory" support.

Nailcote Hall received £15,000 a month of government support to help with its average monthly winter energy bill of £25,000 but Cressman calculated this will be cut to £350 a month with an expected monthly gas bill of £15,000 under the new scheme.

Cressman has had to find ways to cope with the expected increase in costs, which included investing in sensor lights in the hotel's corridors last autumn and installing a £10,000 swimming pool cover in January to keep heat stored for as long as possible.

UKHospitality said the sector faces a £7.3b rise in energy bills and warned "thousands" of venues will go out of business unless action is taken to tackle "profiteering" energy suppliers.

Wood said the reduction in support meant the industry faced a battle "far harder than Covid" while Cressman warned the sector would be hit by further closures.

He added: "I really believe there will be a demolition in this industry. We will have a much-reduced hospitality sector by the end of this year.

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