Independent hoteliers brace for price increases post-Budget, survey shows

More than a third (36%) of independent hoteliers expect their costs to rise by more than £100,000 following the Budget, a survey has revealed.

 

The findings come from BWH Hotels, which claims to be the UK’s largest group of independently-run hotels, following a survey conducted among 38 Best Western hoteliers.

 

It revealed that independently-operated hotels are facing cost increases as high as £750,000, while 60% of hoteliers reported a price hike of more than 20%.

 

Half of the independent hoteliers surveyed attributed the price hike to increases in employers’ National Insurance, while roughly a third said this is being caused by the rises to the National Living Wage.

 

Over four in five (83%) hoteliers said they are looking to cut staff hours as a result, while 77% of respondents said they will have to increase room rates and food and beverage prices to balance the books.

 

Most hoteliers (79%) called for a reduction in VAT on hospitality, while 65% wanted a new Employer NICs band, as well as exemptions for lower-band taxpayers.

 

Tim Rumney, chief executive 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.”

 

Robert Smith, owner of the Plough and Harrow hotel in Birmingham (pictured) and chairman of BWH Hotels GB, added: “While the impact of increases to NMW, 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.”

 

Julie Ashworth, general manager at the George hotel in Norwich, commented: “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.”

 

It comes after Kate Nicholls, chief executive of UKHospitality, warned the industry is in for “18 months of pain” following the Budget.

 

BWH Hotels operates more than 230 properties across the UK.