Falling business energy market prices could help thousands of cash-strapped hospitality businesses to revive their operation, according to a new report by commercial energy and sustainability consultancy Advantage Utilities.
The report indicates that adopting a flexible procurement strategy for business energy could help power a hospitality revival, as gas and power prices return to levels not seen since before the Russian invasion of Ukraine in February 2022.
The advice comes at a crucial time for the hospitality sector, with 85% of hospitality businesses experiencing energy cost increases, leaving almost two-thirds (64%) of hospitality businesses pessimistic about their prospects for the next 12 months. Last year alone, almost 4600 hospitality businesses were forced to close due to soaring energy bills, high inflation and the cost of living crisis.
Flexible procurement involves securing shorter-term energy contracts when prices are lower rather than opting longer term, fixed price contracts. In principle, this allows businesses to continue to secure the most competitive energy prices at more regular intervals.
This was exactly the strategy that Tom Kerridge’s restaurant The Hand and Flowers adopted with the guidance of Advantage Utilities. Adopting flexible procurement alongside other initiatives led to cost savings of £51,175 over a twelve-month period.
Whilst business energy prices have declined for the second year running, the report urges hospitality businesses to remain cautious, given the various environmental and geopolitical risks that could impact energy supply in the coming months.
Commenting on the report findings, Andrew Grover, CEO of Advantage Utilities said:
“It’s clear that energy prices have eased beyond what was initially forecast by several respected commentators. The overall expectation was that energy market prices would have stayed at their historic highs into the longer term. However, whilst prices have come down, the precarious nature of the markets could quickly reverse some of this progress. Navigating the complex nature of the business energy market and knowing when to stick and when to switch is challenging. Seeking the help of energy specialists who really know the market inside and out can help ensure businesses are getting the best deals available.”
Further guidance on energy developments and solutions can be found within Advantage Utilities’ most recent report here.
For more information on Advantage Utilities, visit www.advantageutilities.com
