Hospitality Energy Solutions UK: Hotels & Restaurants

Hospitality Energy: How Hotels and Restaurants Can Reduce Their Energy Costs

Quick Answer: The UK hospitality sector spends an estimated £1.3 billion per year on energy. Energy accounts for between 4% and 6% of a restaurant’s operating costs and a comparable share in hotels. Telnergy has over 20 years of experience in hospitality energy procurement, with clients saving up to £14,000 per year through competitive tendering across 21+ suppliers. Our fee is agreed upfront and can be paid directly or via the winning supplier.

Energy Is One of the Biggest Controllable Costs in Hospitality

Running a hotel, restaurant, pub, or food service operation means running energy-intensive equipment around the clock. Combi ovens, extraction systems, cold rooms, bar cooling, laundry, HVAC, and guest room systems all draw significant power — and for most hospitality businesses, the energy bill is one of the top three operating costs after labour and rent.

UK hospitality businesses collectively spend approximately £1.3 billion per year on energy, according to industry analysis by edie.net.¹ For individual businesses, energy typically accounts for 4–6% of total restaurant turnover and a similar proportion of hotel operating costs — figures that have been under intense pressure since the energy price crisis of 2021–2022.²

Yet energy remains one of the most neglected areas of cost management in the sector. Many hospitality operators — particularly independent restaurants, pub groups, and family-run hotels — are on auto-renewed contracts, paying significantly above-market rates, with no structured approach to procurement. Some have not actively tendered their energy since their business opened.

This is a problem with a straightforward solution. And it is one Telnergy has been solving for hospitality businesses across the UK for over 20 years.

Why Hospitality Energy Is Different

Energy procurement for hospitality is not the same as for a standard office or retail unit. The complexity is higher, and getting the details wrong costs money. Key characteristics of hospitality energy demand include:

High and Varied Consumption Profiles

A busy restaurant kitchen draws significant power during service periods, with sharp peaks at lunch and dinner. A hotel has an almost inverted demand curve from a restaurant — high overnight consumption from guest rooms, corridors, and plant rooms, with morning peaks from breakfast and laundry.

Understanding your actual half-hourly demand profile is critical to getting accurate, competitive quotes. Many smaller hospitality businesses are on estimated profiles or incorrect meter classifications — errors that can mean you are paying network charges appropriate for a much larger load.

Seasonal Demand Complexity

Summer and winter create very different energy demands in hospitality:

Summer: Air conditioning and cooling loads peak, particularly in London and southern England. Bar refrigeration works harder. Outside terrace lighting extends into evenings.
Winter: Heating loads increase substantially across all property types. Kitchen extraction runs longer for heavier menu items. Guest rooms require more continuous heating.

A supplier quoting on a flat profile will either over-price (to cover summer peak risk) or under-price (and then recover costs through out-of-contract charges). Accurate seasonal profiling is a key part of what Telnergy builds into every hospitality tender.

Kitchen Equipment as a Major Load

Commercial kitchen equipment — range cookers, combination ovens, fryers, steamers, dishwashers, extraction fans — typically accounts for 35–50% of a restaurant’s total electricity consumption and the majority of gas consumption.³ These loads are also disproportionately aged: commercial kitchen equipment is often run for 15–20 years, and older equipment carries efficiency ratings far below current standards.

When we work with a new hospitality client, we review not just the contract but the underlying demand profile — identifying whether there are equipment upgrades or operational changes that could reduce the volume being tendered, and therefore the total bill.

Multi-Site Complexity

Many hospitality groups — whether a regional pub company, a restaurant chain, or a hotel group — have multiple sites on different contracts, with different suppliers, at different renewal dates. This fragmentation is expensive. Each site is being tendered individually (if at all), losing the volume premium that comes from packaging a portfolio.

Telnergy specialises in multi-site energy management. We consolidate energy portfolios across sites, aligning contract end dates where possible and presenting the full volume to suppliers in a single tender — often achieving significantly better rates than site-by-site procurement.

The Cost of Doing Nothing

Most hospitality businesses that come to Telnergy are on auto-renewed contracts. When a contract expires without the business actively renegotiating, the supplier rolls the account onto a new contract — typically at a rate that reflects the supplier’s commercial priorities rather than the customer’s best interests.

Out-of-contract (deemed) rates for non-domestic customers can be 30–80% higher than a competitively tendered rate.⁴ Even a business that negotiated a good deal three years ago and then allowed the contract to auto-renew may be paying well above the current market rate.

The maths is straightforward. A restaurant spending £3,000 per month on electricity and gas at a rate 25% above market is losing £9,000 per year — money that could fund a part-time employee, a kitchen upgrade, or simply sit on the bottom line.

Telnergy’s Approach for Hospitality Businesses

Telnergy has been working in hospitality energy for over 20 years. We understand the operational pressures of the sector, the complexity of multi-site portfolios, and the seasonal demand patterns that make hospitality energy procurement technically demanding.

Our process for hospitality clients:

Initial Energy Audit

Before we tender, we review your current contracts, billing history, and consumption data. We check for:

Billing errors (incorrect meter readings, wrong tariff classifications, network charge anomalies)
Out-of-contract rate exposure
Contracts that were auto-renewed without your active consent
Commission non-disclosure by previous brokers (now a regulatory requirement under Ofgem’s October 2024 rules)

This audit regularly identifies savings opportunities before a single new contract is placed. Several of our hospitality clients have recovered significant overpayments through our energy mediation service as a direct result of issues identified at this stage.

Competitive Tender Across 21+ Suppliers

We tender your full energy portfolio — electricity and gas, across all sites — simultaneously to our panel of 21+ UK business energy suppliers. The tender specification includes your accurate seasonal demand profile, half-hourly data (where available), and any specific requirements (green contracts, flexible pricing, multi-site consolidation).

Results come back within 24 hours. We present you with a clear, structured comparison covering unit rates, standing charges, contract flexibility, and — if applicable — green credentials.

Contract Management and Ongoing Support

After contract placement, we monitor billing, manage queries, and alert you when your renewal window opens. For multi-site operators, we provide a consolidated energy management report covering all sites.

We are available throughout the contract term — not just at renewal. If a billing dispute arises, we handle it. If market conditions shift significantly, we advise on whether early termination or novation makes sense.

Case Studies

14-Site Restaurant Group: £14,000 per Year Saved on Gas

A UK restaurant group with 14 sites across England came to Telnergy after their previous broker had allowed multiple sites to auto-renew at different times and with different suppliers. The portfolio was fragmented, several sites were on out-of-contract rates, and the billing varied significantly between sites of comparable size.

Telnergy consolidated the portfolio, aligned contract end dates, and tendered the full gas volume as a single package. The competitive tender produced significant savings over the previous blended rate, translating to £14,000 per year in gas savings across the group. Contract management is now centralised through Telnergy, with all 14 sites under a single account management structure.

Hotel: £6,435 per Year Saved

An independently owned hotel in the Midlands had been on the same combined electricity and gas contract for three years, with an auto-renewal clause that had rolled the contract over 18 months previously without the owner’s knowledge.

We identified the auto-renewal, reviewed the contract terms, and ran a competitive tender for the combined supply. The saving of £6,435 per year versus the auto-renewed rate represented approximately 22% of the hotel’s total annual energy spend. We also identified a potential challenge on the auto-renewal itself — which the client chose not to pursue given the savings achieved on the new contract.

The Regulatory Context: Why Now Matters for Hospitality

Three regulatory developments make 2025–2026 a particularly important moment for hospitality businesses to review their energy arrangements:

Ofgem TPI Disclosure (October 2024): Energy brokers are now legally required to disclose the commission they receive from suppliers at the point of sale. If your previous broker did not do this, you may have grounds for a complaint — and potentially a claim. See our energy mediation page for more detail.

Dispute Resolution Ombudsman Extension (December 2024): The Dispute Resolution Ombudsman (formerly the Energy Ombudsman) now covers businesses with fewer than 50 employees, meaning the majority of independent hospitality operators have access to binding dispute resolution for the first time.⁵

TPI Regulation (July 2025): The Labour government announced full statutory regulation of the energy broker sector, placing TPIs under formal oversight for the first time.⁶ This means the conduct standards that Telnergy has operated to voluntarily — TPI Code compliance, full commission disclosure, DRO membership — will become industry-wide requirements.

For hospitality businesses working with brokers who have not yet adapted to these requirements, this is a moment to ask questions. Telnergy operates to all current and forthcoming standards.

Net Zero in Hospitality

Energy consumption in hospitality is a significant source of carbon emissions — and increasingly, hospitality operators face scrutiny from customers, investors, and booking platforms on their sustainability credentials.

Switching to a REGO-backed green electricity contract reduces your Scope 2 (purchased electricity) emissions to near zero from the first day of the new contract — and typically carries a minimal cost premium when procured through a competitive tender. For many hospitality businesses, a green contract is the single most significant, most visible, and most cost-effective sustainability action they can take.

Telnergy includes green contract options in every tender as standard. For more detail on what net zero means for business energy, see our guide: Net Zero Business Energy.

What to Expect When You Work with Telnergy

Transparent fees: Our fee is agreed with you upfront and can be paid directly or via the supplier as commission. Either way, it is disclosed in full under Ofgem’s 2024 rules.
21+ suppliers: Full market access, not a restricted panel.
24-hour results: Standard commercial tenders return quotes within one working day.
24 years of experience: Including deep sector knowledge of hospitality energy demand.
Mediation capability: If you have a dispute with a supplier or broker, we can manage that process too.
TPI Code compliant and Dispute Resolution Ombudsman members: Independently audited conduct standards.
Multi-site specialists: From single-site independents to regional groups.

Internal Links

Understand how our tender process works: How Energy Tendering Works
Concerned about a past contract or broker conduct: Energy Mediation
Interested in green energy options: Net Zero Business Energy

Frequently Asked Questions

Q: What is the best energy broker for hospitality businesses in the UK?

One that understands hospitality demand patterns — seasonal variation, kitchen loads, multi-site portfolios — and accesses the full market. Telnergy has 20+ years in hospitality, tenders 21+ suppliers, agrees its fee upfront, and is TPI Code compliant.

Q: How can a hotel or restaurant reduce its energy costs?

Run a competitive energy tender. This is the fastest, highest-impact action — reducing unit rates by 10–30% versus an auto-renewed contract. Equipment efficiency upgrades reduce consumption volume on top of rate improvements.

Q: How much does energy cost a typical UK restaurant?

Energy is typically 4–6% of total operating costs — £32,000–£48,000 per year for an £800k turnover restaurant. Competitive tendering saves 10–25% on the rate component: £3,000–£12,000 per year.

Q: Can Telnergy help with multi-site hospitality energy procurement?

Yes — multi-site management is a core Telnergy specialism. We consolidate portfolios, align contract end dates, and tender the full volume as a package for better rates and simplified management.

Q: What are the main energy costs in a hotel?

Room HVAC (40–50%), hot water (20–25%), kitchen (15–20%), and lighting (10–15%), with laundry and pool/spa adding significantly in full-service properties.

Q: My restaurant’s energy contract was auto-renewed without my knowledge — what can I do?

It may be challengeable. Telnergy offers a dedicated mediation service — we assess your case, engage the supplier or broker, and escalate to the Dispute Resolution Ombudsman if needed. See our energy mediation page.

Q: How does seasonal demand affect hospitality energy contracts?

It creates distinct summer and winter demand profiles — cooling peaks in summer, heating peaks in winter. Telnergy builds accurate seasonal profiles into every hospitality tender to ensure you receive fair and competitive quotes.

Start Saving on Your Hospitality Energy Bills

Whether you run a single restaurant or a multi-site hotel group, Telnergy can reduce your energy costs through competitive tendering — with our fee agreed upfront, paid directly or via the supplier.

Contact Telnergy for a hospitality energy review — we will audit your current contracts, identify any quick wins, and run a full tender across 21+ suppliers within 24 hours.

References

edie.net, UK hospitality sector energy spend analysis, 2023. edie.net ↩
UK Hospitality, Hospitality sector cost pressures: energy briefing, 2024. ↩
Carbon Trust, Hospitality sector energy consumption benchmarks, 2023. ↩
Cornwall Insight, Out-of-contract rate analysis for non-domestic customers, 2024. ↩
Energy Ombudsman, Extension of ADR scheme to businesses under 50 employees, December 2024. ↩
Department for Energy Security and Net Zero, TPI regulation announcement, July 2025. ↩

Telnergy Limited is an independent commercial energy consultancy established in 2002, based in Christchurch, Dorset. Ofgem registered TPI · ADR Ref E3561 · CRN 04576876.