Less than two weeks into his tenure as Prime Minister, Andy Burnham has announced reductions in rates for pubs, clubs, and music venues, measures expected to be well received by both domestic and international visitors. However, industry representatives have expressed concern over the exclusion of hotels from these initial support efforts, arguing that the accommodation sector faces significant financial pressures that threaten its competitiveness and sustainability.
The World Travel and Tourism Council identifies high tax rates as a primary factor limiting the United Kingdom’s allure on the global travel stage. Unlike many European counterparts, the UK maintains a standard 20 percent VAT on most short-term holiday accommodations, including hotels, while countries such as Germany apply a reduced rate of 7 percent. Many industry leaders say this disparity undermines the sector’s ability to attract visitors and compete internationally.
Kate Nicholls, chair of UKHospitality, welcomed the government’s measures for the hospitality venues included but emphasized that important parts of the sector remain overlooked. She highlighted the need for business rate reductions across the entire hospitality industry, particularly for hotels, which face substantial increases on their operational costs—some exceeding 110 percent—adding to the financial strain on both providers and consumers.
Hotel operators Hugh and Steve Ridgway, owners of the St Moritz Hotel & Cowshed Spa in Rock, Cornwall, have positioned themselves as advocates for the hotel sector. They noted that unlike pubs or clubs, hotels maintain round-the-clock operations year-round, employing a broad staff roster including housekeeping, kitchen, front-of-house, maintenance, management, and night porters. They described hotels as the "engine room" of the visitor economy, particularly within the growing “staycation” market. The Ridgways have urged immediate inclusion of hotels in any VAT reductions rather than waiting for subsequent budget cycles.
Neal Jones, president of EMEA Marriott International, expressed optimism after Burnham’s recent remarks supporting UKHospitality’s wider call for VAT cuts across the sector from 20 percent to 10 percent. Jones said a lower VAT rate would generate a substantial boost, encouraging investment and job creation within communities nationwide. He called on the Prime Minister to follow through promptly on his commitments.
As the hospitality sector continues to grapple with rising costs and competitive challenges, industry leaders are calling on the new government to broaden its support beyond pubs and entertainment venues to encompass the full spectrum of hospitality services. The inclusion of hotels, they argue, is essential to ensuring sustainable growth and revitalization of local economies across the United Kingdom.