The UK Government is facing renewed pressure to freeze hotel business rate revaluations, after Northern Ireland moved to halt the process following an outcry from hospitality operators.
Hotel owners and advisers 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 expenses.
Frazer Callingham, managing director of Starboard Hotels, said the contrast with Northern Ireland could not be starker.
“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 the impact on one of Starboard’s hotels, where the rateable value is set to rise sharply under the current UK revaluation timetable.
“From 1 April 2026, the rateable value of one of our hotels will increase from £250,000 to £780,000,” he said. “That translates into a rise in rates payable of nearly £300,000 a year. In Northern Ireland, 2027 business rates will be calculated using current valuations, meaning any increases will be far smaller.”
He added that the valuation freeze in Northern Ireland gives hospitality businesses time to challenge assessments properly, while in the rest of the UK transitional relief merely forces operators to adjust to what he described as a “new normal” of permanently higher rates and taxes.
“If the UK Government will not halt the revaluation process, then it should at the very least extend business rates relief across the whole hospitality industry, not just pubs and live music venues,” Callingham said. “Hotels and other hospitality businesses have been explicitly excluded, even though they face the same pressures.”
Tax experts have echoed those concerns. Darsh Shah, partner at Blick Rothenberg, said recent government comments suggesting pubs faced a different situation to the rest of hospitality were deeply flawed.
“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 argued that a comprehensive rates relief package covering all of hospitality should be considered, warning that the industry risks long-term contraction if policy does not change.
“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 that assistance alone would not be enough to stabilise 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 converging into a severe financial squeeze, threatening investment, jobs and the viability of properties across the UK.
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Calls grow for UK to freeze hotel business rate revaluations as costs soar