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Cost of living… Here’s what you could have won.

"For our part we have to recognise the impact our pricing has on customers and as such, following a year of major enhancements to the performance of our software and ensuring it continues to grow in line with customer needs, we are holding our prices into 2023 to ensure the impact of inflation isn’t compounded by our actions."

Reading the East Anglian Daily Times article last month centred around the cost of living crisis and the impact it’s set to have on hospitality in Suffolk, my blood boils.

It’s a real insight into just how incompetently the whole situation is being handled at Government and corporate level – and more so how the impact is reaching much further than the individual UK household. With so many of our own customer base being family run or small to medium enterprises, it’s difficult to comprehend how much of a knock-on effect rising energy prices (amongst many others) are going to have on the backbone of the UK tourism industry. 

With Bloomberg recently predicting that “average households could be facing an annual energy bill of £4,650 from January and £5,456 from April” it is a time of real concern for families. But this impact hits much wider than households, with accommodation-centred business seeing these increases on scale, resulting in a potentially very difficult winter as the number and value of bookings drop to around 70% on average when compared to the busy spring and summer months. Accommodation owners large and small will need to be looking at their businesses and how they can find efficiencies.

This sentiment was echoed by one of our own valued customers Philip Turner, who runs a collection of pubs, inns, and restaurants in East Anglia, as he outlines in the article exactly how detrimental this is for the sector; “Ultimately, it feels the impact of the utility bills increase could have larger long-term impacts on the hospitality sector than Covid.” This is not only a sobering thought but an indication of real concern from within the industry.

With businesses such as Chestnut Group raising the alarm though, surely it’s time for the Government and energy bosses to do more walking and less talking?

Attempt number one announced on the 26th August was another monumental failure, with regulator Ofgem confirming that the price cap will jump to £3,549, equating to an 80% increase to household bills of almost an average £300 a month. These soaring energy prices are a major driving force behind inflation, which has jumped to a 40-year high, further pushing up the cost of living and tightening the already vice-like squeeze on businesses throughout the land. As reported in the Telegraph, the impact is unfathomable with analysts warning that millions of households will be forced into energy poverty. 

There has been an element of expectation following the appointment of Liz Truss as leader of the Conservative and Unionist Party, and thus our new Prime Minister, with a lot of her campaign being focused on the current crisis. Long term solutions to sort a (currently) short-term issue are certainly a part of it which is why it was pleasing to hear reference to the wider issue from the offset, however immediate action is the only way to prevent the impact we know is coming being immeasurably severe. 

For households, this came in early September as an announcement of a £2500 energy price cap which is stated on the Government website as helping typical households “save an average of £1,000 a year on their energy bills”. What’s shocking is that there’s no punchline to this perfect tee-up of a joke. Announcing an almost 100% increase as a roaring success, one which will almost certainly be paid for by the very same households in the long term, is certainly not something that will be celebrated beyond Westminster. 

And for businesses, most forgotten in this crisis following a period of decent Government support through Covid lockdowns, we’ve had to wait until the 21st of September to hear just how bad a winter this is going to be. The answer? Wholesale price caps on gas and electricity until March 2023 to make sure businesses ‘are able to get through the winter’. With a cap of £211 per MWh for electricity and £75 per MWh for gas, the rate for electricity will be slashed by around 50 per cent, while gas prices will cut by 25 per cent for non-domestic customers, which will come as welcome relief for businesses fearing jumps of as much as tenfold in their bills. It’s worth noting that regardless of Government intervention businesses are paying more and this squeeze may well be the final straw.

From the UK Tourism and Hospitality perspective, the knee-jerk reaction for the industry could be to push the costs onto the consumer (as per every other industry it seems). However with an impending recession potentially paving the way for an influx in staycations, along with increased costs associated with international travel (as outlined in my previous post), it might be a time to hold fast – at least in the short term. 

For our part we have to recognise the impact our pricing has on customers and as such, following a year of major enhancements to the performance of our software and ensuring it continues to grow in line with customer needs, we are holding our prices into 2023 to ensure the impact of inflation isn’t compounded by our actions. 

We’re a SaaS business at the end of the day but ever since our founding, our drive has been to partner with and support our customers to get the most out of the product and their market – to that end we will continue to stand by our customers through thick and thin. 

Mat Schollar Inn Style CEO
Thought piece by Mat Schollar | CEO of Inn Style

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