Almost all hospitality SMEs say utility costs are threatening their financial viability

New research by Everflow has shown that 96% of hospitality SMEs say rising water, waste or telecoms costs have put their financial viability at risk, with seven in ten reporting a significant impact. Some have frozen pay, paused recruitment or cut services as a result.

The findings highlight the growing pressure on hospitality businesses, with seven in ten (70%) saying the impact on their financial viability has been significant. These are not discretionary costs. Water, waste and telecoms are essential to running a hospitality business, and the findings suggest they are now shaping decisions about people, service and growth.

Among the hospitality businesses affected, one in five (20%) had frozen or reduced salaries or wages, 19% had reduced their product or service offerings and 18% had paused or cancelled recruitment. These decisions have wider implications for productivity, resilience and growth.

For hospitality operators, services such as water, waste management and connectivity are fundamental to day-to-day operations. Unlike some discretionary business expenses, they cannot easily be removed or scaled back without affecting how a business runs.

For many SMEs, these services are non-negotiable. Yet understanding what they pay for, and what they could change, is often far from simple. When owners are making decisions about pay, recruitment and service because of essential operating costs, it raises the question of whether the utilities sector is doing enough to help businesses understand, manage and reduce those costs.

Everflow believes essential services should be simpler, more transparent and easier for SMEs to manage, so business owners can spend more time running and growing their businesses.

Mari Jones, Water Managing Director, Everflow, said “These findings show that essential running costs are no longer just a line in the accounts. They’re shaping decisions about people, service and growth. When hospitality businesses are having to freeze pay or pause recruitment, that affects colleagues, customers and the wider economy.

“SMEs should be spending more time growing their businesses and less time navigating essential services. Water, waste and connectivity should be simpler, more transparent and easier to manage, and as a sector we need to do more to make that happen.

“In the meantime, businesses can regain some control by understanding what they’re paying for, checking their bills are accurate and making sure services are right for their needs, particularly as they plan for 2027.”