The chief executive of budget hotel giant Travelodge has issued a stark warning that recent Government policies have created "more challenging" trading conditions for the hospitality sector, following the exclusion of hotels from fresh business rates relief.
Budget Hotel Chain Voices Frustration Over Selective Support
In a trading update released just one day after the Treasury announced additional tax relief specifically for pubs and music venues, Travelodge boss Jo Boydell expressed significant disappointment. She stated that the Government's move was effectively "neglecting the broader hospitality sector" by failing to extend similar support to hotels.
"Higher rates and a lack of bespoke support, together with wider regulatory cost increases, sends the message that the Government does not understand the economic value that our sector delivers," Boydell emphasised in her statement.
Business Rates Bill Set to Soar for Travelodge
The hotel chain revealed specific financial pressures, with its business rates bill projected to increase dramatically from £38 million over the past year to £50 million annually in 2026. This substantial rise is due to changes coming into force in April, with the company anticipating "further significant rises" in subsequent years as transitional relief measures are gradually phased out.
Industry body UK Hospitality has reinforced these concerns, warning that hotel business rates are set to increase by a staggering 115% by 2029. This follows changes to the commercial property tax announced in November's Budget, which introduced a lower multiplier for calculating business rates but simultaneously removed a Covid-era 40% discount previously available to hospitality, leisure, and retail businesses.
Additional Regulatory and Employment Cost Pressures
Beyond business rates, Travelodge highlighted other Government policies creating headwinds for the sector. These include higher employment costs linked to increases in the national living wage and what the company describes as "new regulatory requirements." Boydell suggested these combined factors are weighing heavily on the growth potential of hospitality businesses across the country.
The criticism comes despite Travelodge reporting a modest increase in group revenues, which rose by 0.7% to £1.04 billion for the year ending December 31, 2025. The company noted a "good" performance in the final quarter, with revenues lifting by 4.3% to £261 million, buoyed by improved trading conditions in the UK.
Contrasting Government Approach to Different Hospitality Venues
The Government's announcement on Tuesday specifically targeted pubs and live music venues in England, offering them 15% off their business rates bills from April. This fresh support followed warnings about potential closures and job losses in those subsectors. However, the decision has created a clear divide within hospitality, with hotel operators feeling particularly overlooked despite facing similar economic challenges.
Travelodge's trading update indicated that the company benefited from major events during the period, including the World Travel Market at London's Excel centre and significant sports fixtures such as England's autumn rugby international against Australia at Twickenham. Yet these positive factors are being overshadowed by what the company perceives as disproportionate financial burdens imposed through Government policy.
The situation highlights growing tensions between the hospitality industry and policymakers, with sector leaders calling for more comprehensive support that recognises the interconnected nature of Britain's tourism and accommodation economy.
