What will the impact of fuel prices mean for the hospitality industry?

What will the impact of fuel prices mean for the hospitality industry?

What will the impact of fuel prices mean for the hospitality industry?

It's an unfortunate fact that increased fuel prices will have a negative impact on hospitality. With hospitality being so inherently linked to other industries such as food production and transport, a change in fuel prices nationwide will affect the industry from a number of angles.

The price of food and drink

Eating out is one of the most common ways that consumers engage with the hospitality industry across the UK. As a result of increased fuel prices, food production faces increased costs too, with both factories and delivery companies having to spend more to produce and deliver the same supplies. This directly impacts businesses within hospitality, which will face increasing costs that they may have to pass on to their customers to maintain their profits.

Powering venues

With events in Ukraine and countries looking to source gas and oil away from Russian supplies, large scale venues, in particular, will struggle to manage costs in light of the recently increased fuel prices. Heating, lighting, and electrical costs will all escalate with the change. This puts significant pressure on large venues and those offering specialist experiences that require relatively bigger amounts of these resources.

The price of travel

Much of the UK’s hospitality industry relies on people travelling from afar wishing to explore new places. The increase in fuel prices means that transportation services will face their own financial changes. This may make such services more inaccessible to people who can’t or won’t pay the increased travel costs. Consequently, it's likely that the hospitality industry will see a decrease in the number of people engaging with the experiences on offer.

Further impacts on an industry already under pressure

In the current context, with the world still deeply affected by the COVID-19 pandemic, this only puts more pressure on a strained industry. Many businesses will face the difficult choice between maintaining their prices and losing profit or increasing their prices and risking a loss of custom. A loss of either of these could be detrimental to an already struggling business.

As with any change previously experienced by the hospitality industry, increased fuel prices do not prevent businesses from finding ways to adapt and succeed. As the situation evolves, it's important that those in the sector remain knowledgeable and flexible. This is ultimately what will enable businesses to remain stable in these uncertain times.

James Webber Recruitment offers recruitment support across the hospitality industry, should you like any further information please see how we can help on our website.