More than 130 senior hotel and holiday park managers have written to Chancellor Rachel Reeves warning that Labour’s planned changes to business rates pose the biggest threat to the viability of the sector and must not just be limited to pubs.
In a letter coordinated by UKHospitality, industry leaders said the government’s proposed support package for pubs risks leaving large parts of the hospitality sector “high and dry”, despite similar increases in costs.
Signatories include senior figures from Butlin’s, Hilton, Travelodge and Whitbread, as well as Haven, IHG Hotels & Resorts, Leonardo Hotels, Marriott International and Parkdean Resorts.
The intervention comes amid mounting criticism of Labour’s business rates reforms, which leaders say will lead to closures, job losses and higher prices for consumers if left unaddressed.
According to analysis by UKHospitality, average hotel fees will rise by 115 per cent over the next three years, representing an increase of around £205,200 per accommodation. The sector is expected to be the most affected by the changes due to rising tax values and the withdrawal of pandemic-era relief.
In their letter, industry leaders warned it was “crucial” that the government delivers a “solution for the whole sector” rather than just focusing on pubs, as ministers struggle to finalize a support package expected to be announced in the coming days.
“These changes to business rates represent the biggest challenge facing accommodation businesses to their continued viability,” the letter said. “Many companies are facing difficult decisions regarding employment and their ability to invest.”
Executives added that hotels and holiday parks would not be able to “easily absorb” the additional costs and warned that higher prices would inevitably be passed on to consumers, exacerbating pressure on the cost of living.
“We therefore urge you to consider the accommodation sector when considering support measures to address these debilitating changes,” the letter concludes.
The warning follows strong criticism from industry leaders in recent weeks. Sir Rocco Forte said last week the situation was “a mess of the government’s own making” and accused the Treasury of failing to understand the implications of its own policies.
Jo Boydell, managing director of Travelodge, said: “Hotels cannot be stuck with business rates.”
Simon Vincent, Hilton’s president in Europe, the Middle East and Africa, said looming interest rate hikes combined with higher employers’ social security contributions, energy costs and tourism taxes are “hitting profitability and putting jobs and growth at risk, and that is entirely avoidable.”
While pubs have staged high-profile protests, including banning Labor MPs, hotel operators argue that the entire hospitality sector is facing the same pressures without the same political attention.
In the Budget, Reeves announced a reduction in the business rates “multiplier” used to calculate bills, but also confirmed that Covid-era discounts for retail, leisure and hospitality would be phased out. Combined with rising property valuations following the post-pandemic retail recovery, the net effect is resulting in significantly higher bills for many operators.
The controversy was exacerbated by comments from Valuation Office Agency chief executive Jonathan Russell, who suggested ministers knew rateable values would rise even before the Budget was passed – contradicting Business Secretary Peter Kyle’s claims that the Treasury did not have access to the relevant data.
Hospitality leaders are now calling on the Chancellor to act quickly, warning that not extending support beyond pubs risks undermining investment, jobs and growth in one of the UK’s most economically important sectors.
