- An independent review into hotel business-rate valuations has been appointed with findings due by March 2027
- Hoteliers argue the current system unfairly penalises high-value, labour-intensive businesses
- The average hotel is experiencing rates bills rise by 110pc over the next three years
- Prime Minister Andy Burnham lowered business rates by 20pc for pubs and live-music venues
- The October 28 budget is expected to provide further business relief for hotels
The Westminster government has enlisted Jerry Schurder, former business rates policy lead at Newmark, to coordinate an independent review into hotel business-rate valuations, with findings to be sent to the Treasury by the end of March 2027. Hoteliers have long derided the calculation of this tax, with the notion of Fair Maintainable Trade used to calculate a hotel’s business rate working off the estimate of potential revenue and gross receipts rather than basic square footage. Since the end of the pandemic and the tax relief that came with it, local hoteliers say their business-rate bills have been calculated at levels ahead of inflation and not equitable to other High Street businesses.
Hotels, being high-value and labour-intensive businesses, are overly penalised in the current business-rates calculations system, according to industry representatives. Upon taking office in July, Prime Minister Andy Burnham lowered business rates by 20pc for some hospitality businesses such as pubs, clubs and live-music venues.Hospitality has long rallied on the issue, stating that the review signals positive medium-term reform but must be coupled with action at the budget to address rising business rates bills across the whole hospitality sector.The average hotel is experiencing rates bills rise by 110pc over the next three years, with restaurants seeing rises of 54pc, while the combined sector employs more than 1.7m people. Tim Rumney, CEO of BWH Hotels, noted that independent hoteliers don’t need another sticking plaster but a fairer tax environment recognising the vast contribution they make to the economy. The Westminster government has hinted its October 28 budget will provide further business relief for hotels and other hospitality entities
Jerry Schurder, former business rates policy lead at Newmark shared: “The review will examine the valuation methodology for hotels and consider whether the current system properly reflects the realities of running a hotel business.”
Tim Rumney, CEO of BWH Hotels, shared: “The business rates system has never properly reflected the realities of running a hotel, with high fixed costs, 24-hour operations and seasonal demand making sharp increases impossible to absorb.”
Allen Simpson, CEO of Hospitality, shared: “When you have rateable values doubling or tripling at a revaluation, that is the clearest sign yet that the system is broken and in need of proper reform.”
