Paul Gallagher, general manager of Buswells Hotel in Dublin, says the hotel’s energy bills more than doubled to €127,700 for the first seven months of the year compared with the same period in 2019.
The last two years are not comparable because of shutdowns during the Covid-19 pandemic.
His seven-month electricity bill jumped from €29,000 to almost €58,000 and his gas bill from almost €31,000 to just under €70,000 between 2019 and 2022. Gallagher fears that costs will rise further as the hotel remains on a floating rate and vulnerable to further increases.
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“No supplier will lock in and, if they do, it is at some eye-watering level that is much higher than the market. The head wind is that this is going to get a lot worse very quickly,” he said.
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Gallagher said he had little chance of recouping inflated energy costs from about 30 per cent of the business already booked in for next year that was priced at 2019 costs.
“It is very difficult to go back and say you need to put a surcharge on a room. That isn’t possible,” he said.
Hoteliers have limited flexibility to find savings in their energy bills because they must have constant hot water available for guests, he said.
Gallagher is conducting an energy audit to find greater efficiency in the hotel’s lighting such as installing motion sensors where possible, though this is difficult in parts of the hotel such as stairwells.
Simple measures are also being taken, such as asking staff to flick switches or devices off, if they can.
The hotelier is concerned about possible supply disruptions and energy rationing between the peak hours of 5pm and 7pm, one of the busiest times in a hotel’s day, which would be damaging for business.
“If we have energy rationing between 5pm and 7pm, I think it will be really difficult. That would be one of the highest usage points in a hotel. People will want refunds,” he said.
Denyse Campbell, president of the Irish Hotels Federation, said hotels and guesthouses right across the country were experiencing “skyrocketing” energy price increases.
She said she knew of a 145-bedroom hotel in Cork whose monthly electricity bill had jumped from €10,000 in July 2019 to €42,000 last July. Another hotel in the north of the country was forecasting a possible increase of €800,000 in his annual energy bill this year, she said.
“The increases we are seeing are just very, very worrying. We would be urging the Government to take action in order for the businesses to survive. It is a huge concern,” she said.
Gallagher expressed concern for tourism across Europe if energy costs increased and supply disruptions led to a full-blown crisis.
“If there is an energy crisis, does European tourism stop? You would think it would. Why would you leave home if you are going to be in a dark or cold hotel or you have to shower after 9am?” he said.
Situated opposite Leinster House in Dublin city centre, Buswells is a popular haunt for politicians. Gallagher says even they would not be immune from a potential energy crisis this winter.
“Some of them are staying here so they may have to wear their duffel coat in bed,” he said.
