Costs surge at Hollywood Bowl because it warns over a Budget hit from enterprise charges and minimal wage hikes

Hollywood Bowl has joined the business backlash over Rachel Reeves’ Budget after business rate changes and minimum wage rises left it worse off.

The bowling alley operator’s chief executive Stephen Burns told the Mail he was ‘disappointed’ after being ‘led to believe’ that his company would benefit from reforms of the rates system.

The Chancellor boasted that she was introducing ‘permanently lower tax rates for more than 750,000 retail, hospitality and leisure properties’.

But many firms in fact face higher bills, which has caused some business leaders to accuse Reeves of being disingenuous.

Hollywood Bowl’s total bill will increase by 10 per cent from next April. Last month’s Budget introduced a lower ‘multiplier’ into the formula used for calculating business rates – which would have made the company’s bill cheaper.

But at the same time, a revaluation of properties – which also feeds into the formula – does the opposite and will wipe out the reduction, Hollywood Bowl said.

Costs crunch: Hollywood Bowl boss Stephen Burns said he was ‘disappointed’ after being ‘led to believe’ that the company would benefit from reforms of the property tax system

There had been hopes that leisure venues and brick-and-mortar retailers would see lower bills, with warehouses used by online retailers paying more.

Burns said: ‘We know business rates coffers have to be filled up somewhere, the question is where does it come from? There’s been a rebalancing but it hasn’t been rebalanced in the right way.

‘For us, the increase was unexpected and, in line with all the other hospitality businesses, we expressed disappointment.’

While Hollywood Bowl would be able to swallow the costs, Burns said, he was worried about the pressure faced by smaller businesses. 

He added: ‘It’s just much harder for hospitality to respond and react to constant increases in the tax burden. There’s only so far you can go before putting marginal businesses at risk.

‘We can weather it a bit better than pubs or restaurant groups, but nevertheless we are still in hospitality, which is a key employer in the UK.’ 

Chief financial officer Laurence Keen also flagged that increases to wage rates for young people at last month’s Budget would have a ‘significant’ impact on its cost base.

Reeves announced the national minimum wage for 18-to-20‑year‑olds will rise by 8.5 per cent to £10.85 per hour from next April. For 16‑ and 17‑year‑olds it will go up by 6 per cent to £8.

Despite the looming tax rises, Hollywood Bowl said it was cheered by ‘ongoing robust demand’ for bowling trips.

Shares fell 0.5 per cent, despite the firm hailing a fourth year of record sales, which rose 8.8 per cent to £250.7million for the year to September 30. 

And the group is enjoying a ‘really busy Christmas party period’, Burns said.