Less than a third of hospitality businesses feel optimistic about their prospects for the year ahead amid severe and persistent energy price pressures.
Data collected by CGA Insight on behalf of the British Institute of Innkeeping, UKHospitality, the British Beer and Pub Association and Hospitality Ulster found the energy crisis has become “critical” for many businesses with just 29% feeling optimistic about the next 12 months.
Almost nine in 10 (86%) respondents said they were concerned or very concerned about energy costs with the average bill having increased by 81% since last year, three times higher than in 2021.
Businesses that were forced into taking long-term fixed rate contracts when energy prices peaked between July and September 2022 felt the least optimistic about their prospects for the next 12 months. Almost half (46%) of those businesses felt they were at risk of failure in the year ahead, with 92% citing energy prices as a significant contributor to that risk. These businesses were also less likely to have cash reserves.
The trade bodies that commissioned the research reiterated calls for the government to insist that energy suppliers offer renegotiations to businesses locked into sky high contracts, or at least offer financial support to those at acute risk.
In a joint statement they said: "The energy crisis has been pushing pubs, bars and restaurants to breaking point for a year now. The Energy Bill Relief Scheme provided a short respite but with that falling away last month businesses are back to paying high costs, with no end in sight for the thousands locked into contracts who will be obligated to pay extortionate rates well into next year.”
"Put simply, this data is extremely worrying for thousands of otherwise viable hospitality businesses. No profits means nothing to invest back into businesses, no cash reserves means nothing to fall back on, and businesses being forced to close means important, irreplaceable assets being lost from local communities and economies across the country forever.”