Over 130 UK hotel chains and holiday parks have warned Chancellor Rachel Reeves that a looming business rates surge will force job cuts and price increases. The coalition, including Hilton, Butlin's, and Travelodge, is demanding urgent government action as rates are set to jump 115% by April 2029.
The average hotel's business rates bill will soar to £205,200 by April 2029, according to analysis by UKHospitality of Valuation Office Agency data. The sharp rise comes as a current 40% discount for retail, hospitality, and leisure firms ends in April, with new property valuations kicking in for 2026.
The accommodation businesses sent a letter to Reeves calling for a "whole-sector solution" after the government indicated additional financial support specifically for pubs. They stressed the support must extend to all accommodation providers and hospitality operators.
Impact on jobs and prices
The businesses warned the rate increases «present the most significant challenge to accommodation providers in terms of their ongoing viability, and many will face tough decisions in terms of employment and their ability to invest.»
They cautioned that passing costs onto guests «would further add to the cost-of-living pressures already greatly affecting the British public.» The letter emphasized: «This is not something businesses will be able to easily absorb.»
Kate Nicholls, chairwoman of UKHospitality, said: «Hotels and holiday parks are the hardest hit by business rates hikes, facing 115% increases.» She warned: «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.»
What's changing
November's autumn budget introduced a reduced multiplier for calculating business rates. The current discount ends in April, replaced by transitional relief that phases out over three years.
The changes affect business rates, a commercial property tax impacting hospitality and high street firms. The new property valuations for 2026 will significantly increase long-term rates for hotels.
Note: This article was created with Artificial Intelligence (AI).
