While nightlife industries are still attempting to bounce back from the COVID-19 effect, nightclubs, pubs, and bars are hit by skyrocketing energy costs.
Besides escalating costs, including staff payments and insurance, the inflation strain might push nightlife venues towards closure. In the past months, businesses have seen energy costs going through the roof, rising from the fourth most expensive operating cost to the second.
For many businesses, those rates eat up earnings more than rent and business costs combined.
According to NTIA (Night Time Industries Association), current energy bills are ten times higher than two years ago. CEO Michael Kill described the soaring costs as “unsustainable,” asking for rescue packages from the government.
“Each day we are seeing businesses receive energy contract demands of between 300% – 1000% of their current contract rates, making energy the second biggest operating cost for night time economy businesses, second only to workforce.”
A recent NTIA report discovered that 48% of UK businesses are ”barely breaking even,” while a further 20.2% disclosed that they are losing money.
According to the same report, 44.7% are “unsure” if they will survive in the next year, with 20.8% saying they are “not confident.”
While inflation has pushed consumers toward cutting their non-essential spending, energy suppliers’ demands further threaten the nightlife sector, making it challenging for businesses to survive.
Businesses are asked for six-month security deposits for new contracts, but only a handful of companies are willing to take on contracts with nightlife-related industries.