Rising Energy Costs in Hospitality: Practical Steps to Reduce Bills and Improve Margins

“Profit is what you keep, not what you make.” – wise words from an old pub landlord with a leaky boiler and a hatred of spreadsheets.

If you run a hotel, restaurant, or pub in the UK right now, you’ve likely noticed something: energy costs are no longer just a line item, they’re a full-blown heist on your profit margins.

Hospitality margins were already tight. Now? They’re being held hostage by standing charges, unit rates, and climate guilt campaigns telling us to unplug everything except the fairy lights.

So let’s stop panicking and start doing. Because you can’t control global wholesale gas prices, but you can control how much of that heat and electricity you actually waste.

The Ugly Truth: Why Bills Are So High (And It’s Not Just “The Market”)

Yes, the wholesale market is wild. Yes, energy suppliers love a good surcharge. But the real killer? Waste. Energy use that delivers no value.

Here’s a stat that should raise an eyebrow or two over your flat white: most hospitality businesses waste 20-30% of the energy they pay for.

That’s like buying five pints and pouring two down the drain before the customer even lifts it to their lips. Let’s fix that.

Step 1: Understand Your Usage – Smart Meters Are Not Just for Show

First things first: you can’t manage what you don’t measure.

Smart meters aren’t just to help your supplier send you colourful charts once a month. They’re your frontline tool for understanding usage patterns, identifying spikes, and spotting energy vampires.

If you’re still relying on estimated billing or a quarterly surprise, you’re basically running your business with your eyes shut.

Tip: Ask your broker or supplier for half-hourly consumption reports. They’re often free. That graph at 2am? If your fryers or HVAC are still chugging away then, you’ve got a money leak.

Step 2: Get Your Fridge Game Right – Cold Can Cost You Warm Profits

Refrigeration can account for up to 60% of a pub’s total electricity bill. Yep. Sixty percent. That’s a cold, hard fact.

The common culprits:

• Poorly maintained seals

• Condenser coils clogged with fluff and fryer grease

• Old units running on nostalgia and broken dreams

Do this today:

• Clean coils monthly

• Check seals with the “banknote test” (close the door on a fiver – if it slips out easily, your fridge is leaking cold air and cash)

• Consider switching to hydrocarbon-based refrigeration units, which are up to 45% more efficient

Step 3: Kill the Idle Burn – Combat Standby and Out-of-Hours Waste

Ever left the kitchen extractor running after the chef clocks out? Or noticed the bar back fridge humming away all night just to keep empty shelves cool? That’s called idle burn, and it’s a silent profit killer.

Create a shutdown checklist. Laminate it. Hang it up. And train your team so they treat it like the Holy Grail. Examples:

• Extractor fans off

• Lights out

• Fridges consolidated (empty ones off)

• Electric hot water taps turned off at mains if unused overnight

Step 4: Train Staff Like They’re Energy Investors

Your team aren’t just baristas, chefs or receptionists. They’re frontline energy managers. If they leave the door open during winter, or preheat ovens an hour before service, or flick on all lights like it’s Blackpool Illuminations, they’re burning your bonus.

Do this:

• Run a 10-minute weekly “energy huddle”

• Set targets (e.g. 10% drop in evening consumption over 4 weeks)

• Celebrate wins – a pint for the chef who remembers to switch off the combi oven first!

Step 5: HVAC = Huge Variable Cost – Tame the Thermostat

Heating and cooling your premises is non-negotiable. But many hospitality businesses set and forget. Or worse, fight over the thermostat. Golden rules:

• 18-20°C in winter is fine. Every extra degree adds ~8% to your bill

• 25°C in summer keeps guests comfortable without overloading A/C

• Use door curtains or automatic closers on entrance doors

• Consider zoning: heat or cool only the areas in use, not the unused function room that nobody visits

Step 6: Don’t Ignore Daylight – Use It or Lose It

Natural light is free. Electric light is not. It’s amazing how many venues open blinds and turn on ceiling spots at 2pm on a sunny day. Why?

Swap this mindset: “I need lighting to look professional” becomes “I need lighting to be functional and profitable.” Use motion sensors in low-traffic areas like toilets and store rooms. Use daylight sensors that dim artificial light based on ambient levels. They’re not expensive, and they work while you sleep.

Step 7: Plug the Leaks – Literally

You wouldn’t ignore a dripping tap, right? Same principle applies to:

• Leaky compressed air systems

• Boiler heat loss (bad insulation)

• Doors that never quite shut

• Kitchen hoods pulling out heat faster than you can replace it

Quick win: Fit door closers and thermal curtains in draught-prone areas. Even a £50 investment can save hundreds.

Step 8: Procurement ≠ Lowest Price

Now let’s talk contracts. This is where most hospitality businesses get hoodwinked. They see a shiny “lowest unit rate” and forget:

• What’s the standing charge?

• Is it fixed or pass-through?

• What are the out-of-contract penalties?

Also, when does it end? You’d be shocked how many venues let contracts lapse into pricey rollover rates. Solution: work with a broker who isn’t tied to one supplier.

Sector-Specific Nuggets

For Pubs:

• Turn off fruit machines, TV screens, and under-bar chillers during closed hours

• Consider cellar coolers with ambient temperature controls

• Review lighting in beer gardens and signage – switch to LED and timers

For Hotels:

• Use keycard systems to cut power to unoccupied rooms

• Offer guests the choice to decline daily towel or linen changes

• Automate corridor lighting with PIR sensors

For Restaurants:

• Batch cook where possible – ovens use the same energy whether full or half-empty

• Optimise extraction times and speeds based on service flow

• Consolidate delivery fridges and reduce door openings

What’s the Payoff?

Implementing these changes can deliver a 15-30% reduction in energy bills, which goes straight to your bottom line.

Let’s say your current annual energy spend is £36,000. Even a conservative 20% cut is £7,200 saved. That’s:

• 1,440 extra pints poured

• 720 more guests served

• Or simply £7,200 more margin you didn’t have to work for

Final Thoughts: The Profit’s in the Process

There’s no silver bullet. But there’s a silver strategy: small, consistent changes that compound over time.

Teach your team. Review your habits. Measure your usage. And stop treating your energy bill like a fixed cost. It isn’t.

You wouldn’t pour champagne for a guest then throw half of it away, would you? So don’t do it with your kilowatts either.