Hospitality venues 'planning to close' when utility contracts up for renewal

26 July 2022 by
Hospitality venues 'planning to close' when utility contracts up for renewal

Some hospitality businesses are planning to close when their utility contracts are up for renewal later in the year, a procurement company has warned.

Regency Purchasing Group, which sources products for nearly 4,000 businesses across the UK, said a number of its members were anticipating a huge rise in their bills.

Alex Demetriou, managing director at Regency Purchasing Group, warned "hundreds" more hospitality venues could close this winter without government intervention.

Operators have called for a cap on commercial energy bills, with one pub owner telling The Caterer he may have to close after seeing a 500% price rise.

"Until recently, a typical pub was spending around £2,000 per month on utilities, but businesses renewing their contracts are seeing their monthly costs increase to around £7,000," said Demetriou.

"That is an extra £60,000 a year, on utility bills alone. Many village and community pubs do not make £60,000 profit in a year, so the utility bill crisis alone is the difference between making money and losing it."

One in 10 operators have seen their bills increase by more than 200%, according to a recent poll by trade bodies including UKHospitality and the British Beer and Pub Association (BBPA).

Businesses have already had to raise prices and cut back on heating and air conditioning in the face of spiralling energy costs.

France has introduced a tariff shield on energy prices to protect businesses from huge rises in their bills, and Demetriou called for the UK government to adopt a similar policy.

"Our whole country runs on utilities and it's going to take a collective approach to ease the growing pressures on businesses, but that approach has to start with some significant Government intervention," he said.

Regency Purchasing sources products, supplies and services for leisure attractions, golf clubs, pubs, hotels, zoos and farm attractions, among other venues.

Image: Gokhan Y / Shutterstock

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