The leaders of more than 130 major UK accommodation providers, including giants like Hilton, Butlin’s, and Travelodge, have issued a stark warning to the government. They say a looming surge in business rates threatens jobs, consumer prices, and the very viability of many businesses.
An Unabsorbable Financial Blow
In a direct letter to Chancellor Rachel Reeves, the coalition has called for urgent financial support, mirroring measures expected for pubs. The crisis stems from significant changes to business rates announced in the autumn budget. While a reduced multiplier was introduced, the crucial 40% discount for retail, hospitality, and leisure firms is set to end in April.
This will be followed by the introduction of new property valuations in 2026, leading to steep long-term increases for the sector. Analysis by the trade group UKHospitality, using Valuation Office Agency data, paints a grim picture: the average hotel's business rates bill is projected to skyrocket by 115% by April 2029, reaching a staggering £205,200.
Consequences for Jobs and Living Costs
The hotel bosses argue these increases are unsustainable. In their letter, they state the hikes are “not something businesses will be able to easily absorb.” They face a dire choice: cut investment and employment, or pass the costs on to guests.
Choosing the latter would directly fuel the cost-of-living crisis, increasing holiday and travel expenses for the British public. Kate Nicholls, chairwoman of UKHospitality, emphasised the severity, stating: “Hotels and holiday parks are the hardest hit by business rates hikes... Accommodation businesses will unfortunately have no choice but to pass these additional costs on to the consumer – which will only worsen the cost-of-living crisis and drive inflation.”
A Plea for a Whole-Sector Solution
While the government has hinted at additional support for pubs, the accommodation sector is demanding a broader approach. The letter stresses that any relief must be extended across the entire hospitality industry.
“While additional support for the hospitality sector is welcome, it’s critical that it should not only extend to pubs but should be a whole-sector solution,” the signatories wrote. They warned that without intervention, the situation will deteriorate over the next three years as transitional relief tapers off, forcing tough decisions on survival and staffing.
The coalition's appeal underscores a pivotal moment for UK tourism and hospitality, putting pressure on the Treasury to act before the April deadline triggers a wave of financial strain across the sector.
