Calls are growing for the UK to suspend the hotel business rate review as costs rise

The UK government is facing renewed pressure to stop the review of hotel business standards, after Northern Ireland moved to stop the process following an outcry from tourism workers.

Hoteliers and consultants warn that without similar action in England, Scotland and Wales, many operators will be hit with unsustainable cost increases from April 2026, on top of higher employment taxes and rising operating costs.

Frazer Callingham, managing director of Starboard Hotels, said the difference with Northern Ireland would not be significant.

“Following the outcry from hotels and pubs in Northern Ireland, the process of reviewing standards has been suspended,” he said. “The UK government needs to do the same, as many hotels cannot afford the extra costs.”

Callingham pointed to the impact on one of Starboard’s hotels, where rates are set to rise significantly under the current UK review timetable.

“From 1 April 2026, the price paid for one of our hotels will increase from £250,000 to £780,000,” he said. “That means an increase in rates of around £300,000 a year. In Northern Ireland, business rates for 2027 will be calculated using current rates, meaning any increase will be very small.”

He added that the price freeze in Northern Ireland gives tourist businesses time to challenge the assessment properly, while across the UK the temporary relief forces operators to adapt to what he described as the “new normal” of higher prices and higher taxes forever.

“If the UK Government is not going to stop the review process, it should at least extend business rate relief to the whole hospitality industry, not just pubs and live music venues,” Callingham said. “Hotels and other hospitality businesses are clearly excluded, although they face similar pressures.”

Tax experts echo that concern. Darsh Shah, partner at Blick Rothenberg, said the government’s recent comments suggesting that pubs should be treated differently from other travelers were seriously flawed.

“Rachel Reeves’ comment that ‘the situation pubs face is different from other parts of the tourism industry’ is absurd,” said Shah. “Hotels are facing average increases in business rates across the sector.”

Shah pointed out that a comprehensive aid package covering all foreigners should be considered, warning that the industry risks a long-term collapse if the policy does not change.

“The tourism sector is the seventh largest in the UK by number of registered businesses,” he said. “At this rate, this government is going to face its decline for a long time. I wouldn’t be surprised if it drops out of the top ten sectors altogether in the future.”

While pubs are expected to benefit from an annual support package of £100 million until 2029, Shah said aid alone would not be enough to stabilize the sector and predicted further policy reversals following last autumn’s Budget.

The calls come as hotels continue to warn that rising business rates, employer national insurance contributions and wage costs are turning into severe financial pressure, threatening investment, jobs and building performance across the UK.