The UK hotel sector has expressed frustration after being excluded from two rounds of government business rates relief announced by Prime Minister Andy Burnham. Pubs, clubs, and live music venues were included in the tax cuts, but hotels did not receive the same relief.
Dominic Paul, chief executive of Whitbread, which operates Premier Inn hotels, stated that the announcement would not significantly benefit most businesses in the sector. The hotel industry argues that the existing tax framework places them at a particular disadvantage compared to other commercial real estate.
Hotels in the UK are taxed based on the rateable value calculated from the annual revenue a property is expected to generate. This means that hotels performing well and generating strong revenue face higher business rate liabilities. Joe Stather, head of EMEA hotels and hospitality research at JLL, noted that this creates a structural problem for the sector. While hotels face rising labor, energy, and financing costs, their tax obligations increase alongside their trading performance, creating what industry observers describe as a disconnect between operational challenges and tax treatment.
The exclusion of hotels from the government’s business rates relief represents a continued point of contention for the sector, which maintains it operates under less favorable tax conditions than comparable commercial properties.
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