The owners of a north-east hotel have made the agonising decision to close their restaurant and bar in the desperate hope of getting through the winter months as energy costs continue to rise.
Sheila and Mick Howarth of The Belvedere Hotel in Stonehaven have been forced to close their bustling restaurant and bar after costs have become “untenable”.
While still keeping the hotel open over winter, the owners will close the attached dining and drinking area on September 18 until spring next year.
It means 16 part-time and full-time staff have lost their jobs as the business struggles to balance the books – with charging £14 for a pint the only other alternative.
Already facing a £1,400 price rise for their gas and electricity in January this year, they’re hoping the downsize will help their business survive.
‘Battening down the hatches to survive winter’
Mrs Howarth, 59, said: “Costs are so high it is untenable at the moment to keep going as we are, we’ll end up bankrupt.
“So we made the decision to just downsize and honour the accommodation bookings that we have, and shut the bar and restaurant just until spring. Basically just battening down the hatches is our only hope of survival over the winter.”
After their gas company went bust, the gas costs “doubled overnight” and next month, their electricity is going to increase by another £21,000 per year.
The Stonehaven resident added on top of rates and the mortgage: “All the drinks have gone up and all the food has gone up. Our laundry services have put their charges up 60%.
“So things are pretty horrific and for the long term survival of the hotel, we’re just going downsize to accommodation over the winter. Hopefully we’ll be able to reopen in the spring.”
Having to let all staff go
The downsizing will help them save “massively” on their gas and electricity bills, which are currently at around £3,000 per month.
While they thought about closing the business that has been running since October 2011 for a few months, Mrs Howarth said it was not a viable option.
She said: “It would have been an option to close for three months till things got sorted out and through the winter but our standing charges are too high, we can’t afford it. We’ve still got to pay full rates and still got to pay the mortgage.
“So it would cost us about £6,000 to close, so we’ll have to accept that we’re going to incur a massive debt over the winter and hope to recuperate that over the summer again.”
The closing of the restaurant and bar also means the couple will have to lose their 16 part-time and full-time employees while they try and keep the business afloat alone.
A few of those, who are students, are going back to university and the couple are helping the rest to relocate and look for other jobs.
She said it was a really difficult decision but their staff and customers had been really supportive.
“We’ve got a great customer support base who are really supportive,” she added.
“And my staff have been absolutely understanding and brilliant so hopefully we’ll all get through it together.”
‘We’d have to charge £14 for a pint’
The Belvedere Hotel joins many other north-east hotels, restaurants, bars and catering companies struggling to make ends meet as prices increase.
“It’s actually getting to the point, where a lot of the time you’re just not covering your costs,” she added.
“One of the drink reps told us the other day that if we were making the margin that bars should be making on their drink and have historically made, we should be charging £14 a pint.
“That’s what we’re losing effectively. So it’s just not profitable at the moment. And we’ve all worked hard over the summer for very little gain, certainly not enough to see us through the winter.”
Calls for removal of business rate
Mrs Howarth said that more action needs to be taken by the government.
She said: “Get rid of the rates for a start and then obviously we’re downsizing, I’m going to try and appeal against my rates to try and get a reduction while we’re operating as a bed and breakfast.
“They have to do something about the utility costs and also all the people that are jumping on the band wagon.
“We’re trapped. We can’t sell, we can’t shut, we have to just keep going to the bitter end basically.
“We’re quite optimistic that hopefully we can ride this out and get through because we’ve been through a lot worse in some ways but it’s actually worse than the pandemic.
“They’ve just thrown all the costs back at us. All the support that was given has basically been thrown back at us in a different form.”
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