91% of hoteliers say budget will cause soaring costs, survey finds

Half of independent hoteliers surveyed attribute this hike to increases in employers' NI

A new survey revealed that 91% of hoteliers say costs have surged since the Autumn Budget, with six out of 10 reporting a hike of more than 20 per cent. 

In stark findings from Great Britain's largest group of independently run hotels, BWH Hotels - which represents over 200 hotels including Best Western branded properties - more than a third (36%) of hoteliers expect their costs to rise by more than £100,000.

For some, the impact is potentially crippling - with independently operated hotels facing cost increases as high as £750,000. 

Half of the independent hoteliers surveyed attribute this hike to increases in employers' National Insurance and 32% say it's down to increases in the National Living and Minimum Wage.

As a result, 83% of hoteliers say they will be forced to cut staff hours, with 77 per cent feeling they must resort to increasing room rates and food and beverage prices - forcing guests to pay more.

While 68 per cent of hoteliers will delay maintenance or upgrades and 64 per cent will have to resort to minimising staff pay rises in an industry already impacted by shortages.

Tim Rumney, CEO of BWH Hotels, said: “The recent budget has sent shockwaves through an industry that was just getting back on its feet after COVID. Hospitality staff are some of the hardest working people in Great Britain and they’re having to cope with yet another barrage of financial pressures.

“These increases not only push up prices but could potentially worsen the customer experience, leaving independent businesses struggling to survive after years of rising interest rates and the cost of living crisis.

“We are helping hotels to navigate external pressures, drive business and reduce costs - all while keeping their unique identity intact and are proud to do so.”

When asked what support they need from the government, 79% of hoteliers called for a reduction in VAT on hospitality. A further 73% backed business reform, while 65% wanted a new Employer NICs band and exemptions for lower-band taxpayers.

Much like UK farmers, many independent hoteliers said they are sounding alarm bells to their local MPs to take the issue to Parliament for debate.

Julie Ashworth, general manager at the George Hotel in Norwich, said: “The government has failed to consider the devastating impact the minimum wage increase is having on hospitality. It's driving small businesses to the brink… the government is forcing their hand and it’s simply unaffordable, pushing the industry towards even greater chaos."

Robert Smith, owner of The Plough and Harrow Hotel in Birmingham and chairman of BWH Hotels GB, said: "While the impact of NMW increases, National Insurance and business rates is clear and significant, the real unknown is how these rising costs will drive up inflation in the supply chain. Very few hospitality businesses are making enough profit to absorb these hikes and as a result, investment will grind to a halt or stop entirely."

Another BWH Hotelier commented: “This budget will cost jobs, depress wages, decimate investment plans and ultimately prove terminal for many businesses.”

Rumney continued: “In times like these, hoteliers need more than a partner - they need someone who turns challenges into opportunities and that’s something we do best.

“The momentum BWH Hotels has shown this year is proof that empowering hoteliers while safeguarding their independence - ‘The Power of Two’ - works. 

"Our five-year plan to allow independent hoteliers to thrive on their uniqueness under our global reach and scale is already paying dividends.”