The energy cost blind spot: why VAT isn’t the only hidden drain on hospitality margins

But there’s another lever businesses can pull, one that is often overlooked: energy.

Energy is not a fixed cost, yet too many operators still treat it as such. Behind every bill are patterns of waste: equipment running out of hours, heating and cooling fighting each other, demand spikes inflating charges. Without visibility, venues are paying for energy they didn’t even use. 

Hospitality businesses often see their monthly bill as the “final word.” But the bill is just the end result of hundreds of small, daily decisions. Many operators only realise there’s a problem after costs have ballooned. By then, the money is gone.

The reality is this: VAT relief would be transformative. But when it comes to finding something immediate, energy efficiency is one of the fastest wins available. 

Industry data shows that between 10-20% of a typical hospitality energy bill comes from avoidable waste. For a medium-sized hotel spending £300,000 annually on energy, that’s £30,000–£60,000 that could be reclaimed. Multiply that across a group, and the savings potential climbs.

Take our client, the Shannon Springs Hotel, as an example. By analysing their energy data, management identified the most cost-effective upgrades and operational changes, cutting their annual consumption by over £61,000. That money was reinvested directly into the business, money that otherwise would have been lost to inefficiencies no one could see.

Most operators already have smart meters. But raw data alone doesn’t deliver savings. It’s like having a car dashboard with no speedometer; the information is there, but unreadable. What hospitality businesses need are clear insights: 

• When are we using the most energy?
• Where is waste creeping in?
• Which changes will deliver the biggest return?

Only with these answers can operators make informed, confident decisions. And that’s where expertise matters. Data is just numbers until someone translates it into action.

Our Watt Watchers team bridges that gap, turning raw information into practical steps that cut costs, reduce waste, and drive measurable results. 

It’s time to stop treating energy as a fixed cost or something left to the facilities team. Energy is a boardroom issue. It impacts margins, competitiveness, and resilience. The operators who understand and control their energy today are the ones best positioned to thrive tomorrow.

This is not about installing every new technology at once. It’s about starting with visibility, getting the quick wins, and then making smarter long-term investments. That way, when you do put capital into upgrades, you know you’re spending it in the right place. 

Hospitality leaders are right to push for fairer taxation. But in the meantime, the sector doesn’t need to stand still. Energy is one area where operators can act today. If we make smarter use of it, we can strengthen businesses now and be ready to thrive when bigger reforms come.

Data-driven energy management is one of the fastest, most reliable ways to protect margins now, and it starts with asking the right questions about usage. 

You can’t cut what you can’t see. You can’t manage what you don’t measure. But when you do both, you can unlock savings that go straight to your bottom line.