Labour is ‘squeezing the life out of hospitality’: Hotel chiefs slam ‘punitive’ business rates hikes and call for pubs tax U-turn to be extended
Labor is ‘annoying’ the hospitality industry and needs to extend its proposed U-turn on pub taxes to other firms, leading hoteliers have told the Mail.
As backlash grows over the Chancellor’s failed business rates reforms, Sir Rocco Forte has described it as ‘a mess of the government’s own making’.
And he told the Mail it was “frankly disgraceful that the Treasury is trying to claim it doesn’t understand the impact of its own policy.”
His comments were echoed by the boss of Europe’s Hilton hotel group, who said ‘businesses up and down the country face a perilous moment’ due to ‘punitive’ increases in business rates.
Hotelier Sir Rocco Forte
‘Increasing national insurance premiums, higher energy costs and tourism taxes, along with upcoming business rates increases, are impacting profitability and threatening employment and growth. “And it’s completely preventable,” said Simon Vincent, Hilton’s president in Europe, the Middle East and Africa.
And in another rebuke to the government, Travelodge’s chief executive said: ‘Hotels cannot be left empty for business rates to dry up.’
Rachel Reeves is now scrambling to put together a relief package for pubs; The package is sparking outrage across the wider industry, with signs pubs will miss out.
Dominic Paul, boss of Premier Inn owner Whitbread, warned this week that planned increases in business rates would have a ‘damaging’ impact on the hotel industry and called for a ‘hospitality-wide approach’.
He said Whitbread faced a £35 million increase in its business rates bill in 2027, with larger increases expected thereafter.
Forte, chairman of Rocco Forte Hotels, who joined the reaction yesterday, said his group faces a 115 per cent increase in business rates over the next three years.
‘A temporary adhesive plaster solution that targets only pubs will not go far enough,’ he said.
‘This is not fair or sustainable, and many other types of businesses, from pharmacies to gyms, will also be hit.
‘A bold and ambitious government will be looking at real rates reform to level the playing field between online businesses, which pay little or nothing, and brick-and-mortar businesses that bear the brunt.’
Rachel Reeves accused of hindering job creation and economic growth
Hilton’s Vincent noted that hospitality often provides a ‘first step into the world of work’ for young people, providing a vital service at a time when youth unemployment is at 16 per cent.
‘Ministers say they want to stimulate growth, revitalize communities and reduce welfare dependency, but their policies tell a different story,’ he said.
‘Later on layers of extra costs are frustrating the hospitality industry and discouraging employment.
‘The punitive business rates faced by hotel businesses will hinder job creation and economic growth.’
He said while governments in countries such as Greece and Egypt were ‘working hand in hand with hospitality’ to stimulate the economy, the UK ‘risks pricing itself out of the market by imposing a greater tax and regulatory burden on investors’.
Vincent added: ‘The government must take action to ensure hotels are included as part of a sector-wide solution to business rates relief.’
Travelodge chief executive Jo Boydell echoed his comments, saying: ‘Hotels are facing some of the steepest rises of any sector. For Travelodge alone, our UK business rates bill is expected to almost double over the next three years. But signals suggest that current discussions on additional support may be focused elsewhere. This would truly be a missed opportunity.
‘If hotels are excluded from support, the impact will not only be felt on balance sheets. This will impact investment decisions, new hotel developments and ultimately employment across the country.
‘No one disputes that business rates fund vital local services. But a system that discourages investment and new development will ultimately narrow the tax base and undermine the government’s stated goal of growth.’
Avantis Hotels, a family-owned company that owns and operates three Hilton hotels in York and St Albans, said it faces a 152 per cent increase in its business rates bill – an extra £1.18 million – over the next three years.
“This is a huge blow to the industry, taking away cash for business, upgrades and investment,” said Ravi Majithia, director of Avantis Hotels.
‘If the UK wants entrepreneurship, regional growth and locally owned hospitality businesses, policy must support long-term risk takers, not penalize them.
‘If the government makes it harder for business owners and entrepreneurs, capital and investment will move, not stay in the UK.’
Hilton hotel chief warns hospitality firms ‘face a perilous moment’ as tax bills soar
Written by Simon Vincent, President of Hilton Europe, Middle East and Africa.
Hospitality is one of Britain’s great success stories. It is our third largest employer, accounting for 10 percent of GDP, and the largest employer of young people; Approximately 39 percent of the workforce is between the ages of 16 and 24. More than 19,000 people work at Hilton hotels in the UK.
Hilton manager Simon Vincent
But as we head towards January, traditionally the toughest month for our industry, the country’s hospitality businesses face a perilous moment. Impending business rates rises, combined with rising national insurance premiums, higher energy costs and tourist taxes, are impacting our hotel owners’ profitability and threatening jobs and growth. And this is completely preventable.
In an environment where youth unemployment has risen to 16 percent and more than half a million young people are unemployed, accommodation offers a vital solution. This provides the first step into the world of work and lifelong skills; lessons that I personally benefited from at my first job at a local restaurant. It is also a lifeline for those not in education, employment or training, offering a wide range of lifelong employment opportunities from finance, architecture and sales to engineering, marketing and technology.
Hospitality also creates opportunities for people with learning disabilities, as demonstrated by our successful partnerships across the UK to train and employ people with Down Syndrome and other disabilities.
Recent policy developments threaten to put this at risk. Ministers say they want to stimulate growth, revitalize communities and reduce welfare dependency, but their policies tell a different story. The many layers of extra costs are frustrating the hospitality industry and discouraging employment.
The punitive business rates facing hotel businesses will hinder job creation and economic growth and impact the profitability of our hotel owners and franchisees, many of whom are small and medium-sized businesses. One of our hoteliers, Avantis Hotels, a small family business that owns and operates three Hilton hotels in York and St Albans employing around 100 people, is facing a 152 per cent increase in business rates over the next three years, meaning an extra £1.18 million in costs across its three properties.
It is these hotels that are vital to their communities, creating jobs, providing education and supporting local businesses through their extensive supply chains, that are suffering under the weight of rising costs.
In my role covering more than 1,500 hotels in 85 countries, I see governments like Greece and Egypt working hand-in-hand with the hospitality and tourism economy as an engine of growth and opportunity, supporting local developers to open new hotels and create jobs. The UK, which is the continent’s third-largest hotel market but ranks 50th in Europe in terms of capital investment, risks pricing itself out of the market by imposing a greater tax and regulatory burden on investors.
Hilton has a proud 60-year heritage in the UK and remains deeply committed to the British hospitality industry. We understand the challenges facing the government, but now more than ever the UK needs every driver of growth. That’s why the government must take action to ensure hotels are included as part of a sector-wide solution to business rates relief.
Otherwise we will see serious long-term impacts on jobs, the economy and the travel costs of hard-working British families.
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