Three in five operators admitted they are no longer profitable | Photo credit: Chris Haws

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One in five hospitality businesses in the UK are concerned about their survival during the ongoing energy and cost-of-living crisis, according to UKHospitality.

A new survey from the UK trade advocacy revealed the average energy price increase for hospitality businesses now sits at 238%, with more than 70% of organisations in the industry witnessing their bills more than double.

UKHospitality said average energy costs as a percentage of turnover have jumped from 5% to 18% in the last three years. Additionally, the trade body warned that energy bills now account for a greater proportion of turnover than rent and rates combined.

To mitigate the costs, three-quarters of UK hospitality businesses surveyed said they have been forced to rise prices, more than six in 10 have cut staff hours, four in 10 have lowered headcount and half are operating reduced trading hours.

Three in five operators admitted they are no longer profitable.

In August 2022 UKHospitality urged the UK government to introduce a comprehensive package of support measures until the end of March 2023, including a business rates holiday for all hospitality premises and the reintroduction of a trade credit insurance scheme for energy.

More than 300 hospitality businesses, including Caffè Nero and Just Eat, have signed an open letter to new Chancellor Kwasi Kwarteng seeking a plan that 'cuts business costs, stimulates demand and tackles inflation'.

“The hospitality sector is critical to our national economic and social recovery and with support will be well placed to drive growth, generate jobs and invest in local communities. To achieve this however, the new government needs to act quickly to address the soaring energy costs that are strangling the sector,” said Kate Nicholls, CEO, UKHospitality.

UKHospitality surveyed 150 companies which collectively operate 7,500 venues and employ 56,000 people.