Spiking UK Energy Costs Pressure Hoteliers, Guests
Discretionary Spending Likely To Take a Hit
Energy cost increases are causing pain in the United Kingdom hotel industry, and with domestic residents who face less discretionary income because of inflation-linked, higher gas and electricity prices.
LONDON - Energy cost increases are causing pain in the United Kingdom hotel industry, and with domestic residents who face less discretionary income because of inflation-linked, higher gas and electricity prices.
On Aug. 26, the Office of Gas & Electricity Markets, known as OFGEM, a statutory body set up by Parliament to regulate energy prices, best practices and instigate greener industry methodology, increased the energy price cap to 3,549 pounds sterling ($4,160) per year, an increase of more than 80%, starting in October.
The government predicts this increase will affect 22 million customers.
The cap also was raised in April 2022 from 1,277 pounds sterling ($1,493) per year to 1,971 pounds sterling ($2,304) per year, an increase of more than 54%. From April to October 2022, the overall price increase has been almost 180%, and there are more increases due in 2023.
OFGEM blames inflation, the Russian invasion of Ukraine and the subsequent geopolitical changes to European energy provision for the increase.