Energy costs and interest rates for Inverness hotel go up by over £1m per year
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On Thursday (May 11) the Bank of England increased the base rate to 4.5 per cent – the highest rate in nearly 15 years.
This is the 12th time the Bank has raised interest rates since December 2021 in what it says is an attempt to curb inflation.
However, the opposite is happening for the Kingsmills Hotel in Inverness, as it has seen its energy costs and interest rates go up by over £1 million per year.
Tony Story, the owner of the luxury hotel in Culcabock Road says that the continual rises are not doing anything to help hospitality businesses and it is only putting them under more strain.
He commented: “What is happening is the definition of insanity. They keep raising interest rates saying that is going to help but it is just putting more pressure on hospitality businesses. It is not decreasing inflation.
“It’s the banks and energy companies that are the winners at the end of the day.”
Energy prices alone at the Kingsmills Hotel have gone up by over £600,000 annually, and that is not taking into account its sister hotel Ness Walk.
Mr Story is calling for more to be done by the UK government to help hospitality businesses after a series of challenges over the last few years including Covid, Brexit and now the cost-of-living crisis. Food prices have also jumped by 19.2 per cent since March last year, which is also having a big impact on business.
“Hospitality has gone through a lot over the last few years,” Mr Story said.
“We are hearing of hospitality businesses having to close throughout the UK at the moment due to continued cost rises.
“What would help is if the VAT rate was reduced. It was reduced during Covid so it can be done, and it would help a lot of businesses out.”
