Labour’s increases to business rates are ‘the most significant challenge’ faced by hotels and holiday parks, more than 130 top bosses have told the Chancellor.
As the backlash over the Chancellor’s botched reforms of the property levy mount, Rachel Reeves has been warned her proposed relief package for pubs must extend to other hospitality firms too.
Leading executives – including from Butlin’s, Hilton, Travelodge and Whitbread – have sounded the alarm over looming closures and price increases.
The average hotels business rates bills will increase by 115pc over the next three years, totalling £205,200, according to analysis by UKHospitality. This makes the sector one of the hardest hit by changes.
In the letter, which has also been signed by Haven, IHG Hotels & Resorts, Leonardo Hotels, Marriott International, and Parkdean Resorts, bosses say it is ‘critical’ the Government provides ‘a whole-sector solution.’
Reeves is now scrambling to put together a relief package for pubs, to be announced in the next few days – sparking fury across the wider industry amid signs they will miss out.
Rachel Reeves is expected to offer temporary rates relief to pubs but not hotels
The letter, organised by UKHospitality, added: ‘These changes to business rates 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.’
And firms will not be able to ‘easily absorb’ the extra costs, meaning higher costs that would ‘further add to the cost-of-living pressures already greatly affecting the British public,’ it said.
‘We therefore urge you to consider the accommodation sector when considering any support measures to address these crippling changes,’ the letter added.
It follows furious remarks by top bosses last week, with Sir Rocco Forte telling the Mail the situation was ‘a mess of the government’s own making’.
And he said it ‘is frankly embarrassing that the Treasury has been trying to claim it didn’t understand the impact of its own policy’.
Chief executive of Travelodge, Jo Boydell, also warned: ‘Hotels cannot be hung out to dry on business rates.’
‘Looming business rates hikes, coupled with increased national insurance contributions, high energy costs and tourism taxes, are impacting profitability and threatening jobs and growth. And it’s entirely avoidable,’ said Simon Vincent, president of Hilton in Europe, the Middle East and Africa.
Pubs have been banning Labour MPs from their premises as they say they feel betrayed by the Budget after Labour’s promises to help the High Street.
In the Budget, the Chancellor announced a reduction in the so-called ‘multiplier’ used to calculate business rates.
But she also confirmed that Covid-era discounts for retail, leisure and hospitality businesses would be phased out.
Alongside soaring valuations – in part due to a rebound in trading following the pandemic – it means business rates bills are rising rather than falling
The head of the Valuation Office Agency (VOA) Jonathan Russell suggested that ministers were aware before the Budget that rateable values were set to rise – undermining claims by Business Secretary Peter Kyle that the Treasury ‘didn’t have access’ to crucial information.
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