Rateable Values for Some Hotels are Going Up by Over 300%

Government tax and employment policies are hurting hospitality profits even during the usually prosperous Christmas season, say leading audit, tax and business advisory firm, Blick Rothenberg.

Darsh Shah, a Partner at the firm, said: “A permanently lower business rates multiplier, 5p below the standard rate, was set for eligible businesses in the Autumn Budget. But recent property revaluations mean that many businesses, particularly larger hotels and pubs, will still see their rateable values rise significantly. In some cases, by as much as 76% for accommodation businesses and 30% for pubs.”

Paul Callingham, Chairman of Starboard Hotels said: “I have seen some of our 21 hotels rateable values increase by over 300%! The rateble value at our Ibis Styles Hotel in Gatwick has increased from a 2024 valuation of £250,000 to 2026 valuation of £780,000.”

Darsh said: “Another client, a casual dining group, has had flat December sales, this is concerning as the Christmas season is usually when their profits increase. On top of this, their overall costs have all gone up by over 15%, and they are now expecting to make a loss in this financial year.”

He added: “Mayors in England have been granted the power to introduce a local overnight visitor charge. This will be another direct tax on hoteliers, as their quoted room rates need to include all taxes. The variations in cost and method of collection across the country will be hard for hospitality businesses who own multiple properties to manage. There is also no planned control as to where this money is to be spent. The local consumer will see higher room rates as most hotels in the UK are occupied by domestic tourist and business travellers.”

Darsh said: “The increases to the National Living Wage and National Minimum Wage have added to the costs hospitality businesses face. The employments rights bill will mean employees have day one protections, making it harder to remove workers who are costing the business money due to poor performance or problematic behaviour.”

He added: “Alcohol duty rates are set to increase in line with RPI inflation (3.55%) from February 2026. This will mean hospitality businesses have to put their drink prices up, and consumers may choose to get cheaper alcohol from supermarkets.”