The UK Government is under renewed pressure to freeze hotel business rate revaluations, after Northern Ireland moved to halt the process following widespread complaints from hospitality operators.
Hotel owners and advisers warn that without similar action in England, Scotland, and Wales, many operators will face unsustainable cost increases from April 2026, on top of rising employment taxes and operating expenses.
Frazer Callingham, managing director of Starboard Hotels, said the contrast with Northern Ireland highlights the urgency of government intervention.
“After an outcry from hotels and pubs in Northern Ireland, there has been a halt in the rate revaluation process,” he said. “The UK Government must follow suit, as many hotels can ill afford a further increase in costs.”
Callingham pointed to one Starboard property, where the rateable value is set to jump from £250,000 to £780,000 under the current UK timetable. “That translates into a rise in rates payable of nearly £300,000 a year,” he said. “In Northern Ireland, 2027 business rates will be calculated using current valuations, meaning any increases will be far smaller.”
He added that the freeze gives hospitality businesses time to challenge assessments, whereas in the rest of the UK, transitional relief merely forces operators to adjust to what he called a “new normal” of permanently higher rates and taxes.
Callingham suggested that if the UK Government will not halt the revaluation, it should at least extend business rates relief across the entire hospitality sector, not just pubs and live music venues. “Hotels and other hospitality businesses have been explicitly excluded, even though they face the same pressures,” he said.
Tax experts have echoed those concerns. Darsh Shah, partner at Blick Rothenberg, criticised recent government comments implying that pubs face different challenges to the wider hospitality sector.
“The comment by Rachel Reeves that ‘the situation the pubs face is different from other parts of the hospitality sector’ is beyond ridiculous,” Shah said. “Hotels are facing the steepest average increases in business rates across the sector.”
Shah warned that without comprehensive rates relief covering all hospitality, the industry risks long-term contraction. “The hospitality sector is the seventh largest in the UK by number of registered businesses,” he said. “At this rate, this government will be responsible for its long-term decline. I would not be surprised if it falls out of the top ten sectors altogether in future.”
While pubs are set to benefit from a £100 million annual support package until 2029, Shah said this aid alone would not stabilise the sector and predicted further policy reversals following last autumn’s Budget.
The warnings come as hotels continue to report that rising business rates, employer national insurance contributions, and wage costs are converging into a severe financial squeeze, threatening investment, jobs, and the viability of properties across the UK.
