Hotel sector warned to brace itself for hike in energy costs

Figures released today (2 June) by energy broker Power Solutions show that in the past year, the electricity base load price has increased by 22% for hotels, while the forward gas price has risen by 35%.

This means that in real terms, an average hotel with 50 rooms using 500,000 kWh of electricity, can expect a price increase of approximately 20% – equating to £10,000 – when negotiating its next contract.

Meanwhile a typical hotel using 500,000 kWh of gas can expect a price increase of approximately 35% (£4,000) when negotiating a new contract.

Power Solutions’ managing director, Jeremy Taylor, said: “Energy prices are increasingly becoming one of the key issues for hotel businesses as the additional costs are directly hitting the bottom line. Hotel owners and investors really need to sit up and take proactive action to help manage these costs.”

The research also revealed that up to 25% of hotels either have no contract in place or have been rolled into a new contract by their energy providers and are therefore exposed to higher price rises.

The lack of a contract, which affects as many as 35,000 hotels in the UK, is estimated to be costing the UK’s hotel industry more than £250 million a year in unnecessary energy costs.

Maxine Perella