Major hotel chains and holiday park operators across the United Kingdom are urgently calling on Chancellor Rachel Reeves to provide financial support to the entire hospitality sector, as looming business rate increases threaten to cripple the accommodation industry.
An Industry-Wide Plea for Support
More than one hundred and thirty accommodation businesses, including household names such as Hilton, Butlin's and Travelodge, have collectively written to the Chancellor seeking an urgent solution. This coordinated action comes in response to the Treasury's recent announcement of additional tax relief specifically for pubs and music venues, a move that hotel leaders argue neglects the broader hospitality landscape.
A Staggering Financial Burden
The core of the issue lies in significant changes to business rates set to take effect in April. Travelodge has provided a stark example, revealing that its annual business rates bill is projected to surge from £38 million over the past year to £50 million in 2026. The company warns of "further significant rises" in subsequent years as transitional relief measures are gradually phased out.
This financial pressure stems from a combination of factors announced in the Autumn Budget. While the Treasury has introduced a reduced multiplier for calculating rates, it has also confirmed that the current 40% discount for retail, hospitality, and leisure firms will end in April. This discount will be replaced by a transition relief scheme, but business leaders contend that its three-year phase-out period is insufficient for companies to adapt to the dramatically higher costs.
Projected Tax Hikes and Sector Viability
The situation is further exacerbated by new property valuations scheduled for implementation in 2026. Industry analysis suggests these valuations could drive the average hotel's annual tax bill to an estimated £205,200 by 2029. Trade body UKHospitality has labelled this a staggering increase that most businesses cannot absorb without resorting to severe operational changes.
In a trading update, Travelodge's boss Jo Boydell emphasised that higher rates, coupled with a lack of bespoke support and wider regulatory cost increases, send a damaging message. She stated it implies the Government does not fully comprehend the substantial economic value delivered by the hospitality sector.
The Call for a Comprehensive Solution
The collective letter from accommodation firms warns that the projected 115% surge in business rates poses a critical threat to the ongoing viability of hotels and holiday parks. Industry leaders are demanding that any specific financial support offered to pubs be extended to create a "whole-sector solution." They argue this is essential to prevent a fragmented and unfair recovery across hospitality, ensuring a level playing field.
Consequences of Inaction
The correspondence to the Chancellor outlines severe potential consequences if support is not forthcoming. Firms may be forced to make tough decisions regarding employment levels and future capital investment. Reducing staff numbers or halting essential property improvements would, they warn, damage the long-term health of the UK's vital tourism and leisure infrastructure.
Kate Nicholls, chairwoman of UKHospitality, has issued a further warning. If these mounting tax pressures continue unabated, businesses will have little choice but to pass the substantial costs onto their guests. Such price hikes would not only exacerbate existing cost-of-living pressures for the British public but could also deter domestic holidaymakers, creating a negative ripple effect throughout the economy.
The industry's unified message is clear: without targeted intervention from the Treasury, the accommodation sector faces a period of significant strain that could impact jobs, investment, and affordability for consumers nationwide.
