Hotel groups and holiday park operators across the UK have warned that a sharp increase in business rates could lead to job losses and higher prices for consumers, unless financial support is extended beyond pubs to cover the wider hospitality sector.

Major brands including Hilton, Butlin’s and Travelodge are among more than 130 accommodation businesses urging the Chancellor to take urgent action ahead of changes announced in the Autumn Budget.

In November, the Government confirmed significant reforms to the business rates system, a commercial property tax that heavily affects hospitality and high street businesses. While the Treasury announced a reduced multiplier for calculating rates, it also confirmed that the current 40 per cent discount for retail, hospitality and leisure businesses will end in April.

This discount will be replaced with transitional relief, although this support will gradually be withdrawn over a three year period.

The Budget also confirmed that new property valuations will be introduced from 2026. These updated valuations are expected to result in substantial long-term increases in business rates for hotels and other hospitality operators.

According to analysis by UKHospitality using Valuation Office Agency data, the average hotel business rates bill is projected to rise by 115 per cent by April 2029, reaching an average of £205,200.

In a letter sent to the Chancellor, industry leaders warned that the scale of the increases would be extremely difficult for businesses to absorb. They also cautioned that passing these costs on to guests would place additional pressure on households already struggling with the cost of living.

While the Government has indicated that pubs may receive further financial support following warnings from that sector, hotel operators have stressed that any assistance must apply across the entire hospitality industry.

In their letter, they said additional support was welcome but argued that limiting help to pubs would leave accommodation providers facing serious financial strain. They warned that the changes to business rates represent the most significant threat to the ongoing viability of many hotels and holiday parks, forcing difficult decisions around staffing levels and future investment.

They also highlighted that the impact would intensify over time as transitional relief is phased out, leaving businesses with little option but to raise prices or cut costs.

UKHospitality chair Kate Nicholls said hotels and holiday parks were facing the most severe increases, with average rises of 115 per cent. She warned that the changes would damage employment, reduce investment and, in some cases, threaten the survival of businesses.

She added that many accommodation providers would have no choice but to pass the additional costs on to customers, further worsening the cost-of-living crisis and adding to inflationary pressures.

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