Hospitality businesses fear impact of rising costs on Easter trade
- Credit: Nick Smith Photography
The hospitality industry fears the cost-of-living crisis could result in a fall in revenue over the important Easter period as customers focus on essential spending rather than eating out.
Household budgets are being squeezed by sharp price rises in the cost of everything from fuel and gas to council tax and water bills, stoking fears that pubs and restaurants could lose vital income as the sector recovers from the effects of the Covid-19 pandemic.
The biggest jump in domestic energy bills in living memory has come into effect after regulator Ofgem was forced to hike the price cap by 54% as gas prices soared to unprecedented highs.
Heating oil has also jumped 75% in price, while water bills are up 6.7% and council tax has risen by 3%.
Corinne Webber, landlady of The Jolly Sailor in Orford, said electricity costs at the pub had risen by 50%, while food and drink costs had also gone up.
She added: “If people have not got money to spend they are not going to be coming out. Normally, Easter is the beginning of our season so we will see how it goes.”
Fergus Fitzgerald, production director for Adnams, said the brewer was trying to keep costs to a minimum but said some of the extra pressure would have to be passed to the customer through increased prices.
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Ways had been found to reduce costs, including energy efficiency measures, such as capturing steam released during the production process for re-use.
He said: “We have put price increases through earlier in the year and I think we are always conscious that we want going out to the pub to be an affordable thing that people can do, but at the same time we need to be sure that pubs can make a profit.
“I think coming out of Covid, there is a growing demand out there so I think we need to be conscious that we don’t make it uncomfortable for customers and make sure that we are as lean as possible.”
Mr Fitzgerald said "a lot of work" had already been done to address energy efficiency and this work would hold Adnams, which runs pubs and hotels across Norfolk and Suffolk, in good stead.
“It is difficult out there, but like any business, we are trying to make sure that we only pass on what we need to pass on to the customer,” he added.
Nonetheless, he said that many people still wanted to visit pubs to enjoy themselves, especially after spending a lot of time in lockdown during the pandemic.
“I think it will come back a lot if prices get too out of sync and people might drink at home more than they used to, but that is following a long-term trend, but we need to make sure that when people do go out, they have as good a service as possible.
“I think coming out of lockdowns, people do appreciate the importance of pubs on the social side,” Mr Fitzgerald said.
His words about the importance of providing a good service were echoed by David Scott, chief executive of The Hotel Folk, which runs hotels and restaurants including The Brudenell in Aldeburgh and The Crown in Woodbridge.
He said if customers were paying more, they would expect their experience to match.
He described a "mixed picture" in which the hotels appeared to be getting as many, if not more, bookings over the Easter period than before the pandemic.
However, the forecast for the restaurant side was less clear as this was more dependent on ‘day trippers’ and ‘non-hotel residents' who may be more affected by the rise in fuel costs, especially if they have to travel a long distance to get there.
Mr Scott said the demographic who stayed in hotels tended to be more insulated against rising prices as they had pensions and did not have mortgages to pay.
He added: “People can now go abroad at Easter for the first time in two years. There are so many things going on at the moment, it is really hard to say ‘this is happening because of that.’ The hotels, the holiday part, do not seem to be affected as bookings are higher than they were in 2019.
“But I think with the coastal day trip, potentially people are thinking twice before they do that because of all the things that are going on at the moment,” he said.