Hospitality operators energy costs have increased by 65% in the last decade

New data from Dojo’s Inflation Index has indicated that the hospitality industry stands amongst the UK sectors most impacted by rising energy costs*.

According to the research, on average, UK hospitality businesses have seen a 65% increase in energy prices over the past decade, with catering companies seeing the biggest increase of 73%, followed by hotels at 64% and pubs/bars at 57%.

This is significantly higher than most other industries, with operating costs increasing by an average of 48% across all businesses in the UK.

While the UK Energy Secretary has advised hospitality venues to save energy by serving warmer beer this summer, the business energy team at small business comparison site Bionic have identified five more practical ways that hospitality operators can cut down their energy bills.

Five practical ways hospitality businesses can reduce their energy bills

Les Roberts from the energy team at Bionic recommends that hospitality operators take the following measures to lower their energy bills:

1. Don’t overlook water management and maintenance

Water systems, particularly when it comes to hot water usage, are highly energy-intensive, so even small reductions in water consumption can deliver substantial energy savings.

Some of the most common sources of water waste arise due to poor management and maintenance. Small and medium enterprises frequently waste unnecessary water and energy due to ageing infrastructure and inefficient fixtures, which lead to things like leaks, dripping taps, and inefficient appliances that can result in substantial hidden costs.

Therefore, addressing these issues through regular audits, maintenance, and upgrades can deliver immediate water and energy savings.

2. Install LED light sensors in low-traffic areas

Lighting can account for up to 40% of electricity, especially when daylight hours are shorter. Installing motion sensors ensures lights automatically turn off after a minute or two of inactivity. Many businesses install light sensors in areas like storerooms and toilets because they are low-traffic areas that only need lighting for short spells.

Swapping out halogen bulbs for LED bulbs can also help maximise business energy savings. LED lights use 90% less energy than traditional incandescent bulbs and have significantly longer lifespans. While initial costs are higher, the savings quickly offset the purchase price.

3. Encourage staff to be energy-aware 

Research has found that more than a third (35%) of small business employees waste more energy at work despite adopting energy-saving measures at home.

This highlights the importance of talking to your staff about energy-saving initiatives and explaining why it’s so important. You can even use things like incentives and rewards to encourage engagement.

4. Install a smart meter to save 

Smart meters can help hospitality businesses gain better control over energy costs by providing accurate, real-time information on how and when energy is used.

By delivering detailed consumption data, smart readers can help operators to identify waste patterns and inefficiencies. This enables businesses to make informed changes that reduce energy usage and lower utility bills.

5. Avoid out-of-contract rates 

Missing your business energy renewal window can result in your supplier automatically placing you on deemed or out-of-contract rates. These are typically 20-50% above a negotiated fixed deal.

Out-of-contract (OOC) rates are the variable prices your current supplier moves you onto once your fixed-term energy agreement ends, provided your contract has specific terms allowing this. These rates are not protected and are higher than fixed-term contracts.