UK Accommodation Businesses Urge Government Action on Business Rates Increases

More than 130 accommodation businesses have called on the UK government to implement a sector-wide solution to address significant increases in business rates over the next three years.

A group of over 130 accommodation businesses, including Butlin’s, Haven, Hilton, IHG Hotels & Resorts, Leonardo Hotels, Marriott International, Parkdean Resorts, Travelodge, and Whitbread, have sent a letter to the Chancellor requesting government intervention to address rising business rates. The businesses state that the increases represent the most significant challenge to ongoing business viability and will affect decisions on employment and investment.

According to an analysis of Valuation Office Agency (VOA) data by UKHospitality, the average business rates bill for hotels is projected to increase by 115% over the next three years, reaching £205,200. The group warns that these increases are not costs businesses can easily absorb. The letter notes that passing additional costs onto guests would contribute to existing cost-of-living pressures.

The letter, dated January 18, outlines concerns that many accommodation providers, including small and medium-sized businesses, will face significant increases in their business rates bills. The group argues that while additional support for the hospitality sector is welcome, it should extend beyond pubs to include the entire sector.

The businesses state that the changes to business rates are expected to become more severe as transitional relief tapers off in the coming years. The letter also references existing pressures on hotel development in the UK, including increased construction costs and the potential introduction of new tourism taxes.

The group is urging the Chancellor to consider a hospitality-wide solution to mitigate the impact of the business rates increases. The letter states that the sector is facing challenges that could affect employment, investment, and the viability of businesses.

No specific proposals for a solution are detailed in the letter, but the businesses request that the government address the issue before the increases take full effect. The letter is available in full on the UKHospitality website.

The government has not yet responded publicly to the request.