Real Rates Reform

This British hotel chain in central London, offers smart, space-efficient rooms at a more accessible price point than most competitors.

The latest Budget delivers a significant blow to the hotel chain and wider hospitality sector. From April 2026, the chain’s business rates bill will rise by an estimated 100% across its 12 London hotels — a £4 million increase spread over four years. This means almost 10% of all revenues will go directly to business rates, a stark jump from the typical 2% benchmark. These escalating costs are entirely out of step with revenue growth over the past six years.

To cope, the chain is reviewing staffing levels across its hotels and leaving vacancies unfilled — decisions that risk service standards and jobs in a sector already under intense pressure.

In the heart of the West End, this world-class attraction delivers unforgettable experiences for families and corporate groups alike, attracting 100,000s people per year to the area. 

Under the new higher rate multiplier due to come into effect in April, as well as the removal of the rates relief scheme, the business will see its annual rates bill increase by over a third, pushing its total tax burden past £2 million.

As a result, the business has already began to review further UK investment in the short term and focus on international markets for growth and expansion. For the wider economy, that means fewer jobs, less innovation, and a weaker experience economy — putting the ambitions of the London Growth Plan at risk.

To keep London’s cultural attractions thriving, tax policy must strike a balance: raising revenue without stifling the very industries that make the city a global leader.

This West End theatre hosts a resident production and delivers over 400 performances each year. The venue employs a mix of permanent staff, front-of-house teams, and technical crews, and, like many of the UK’s historic theatres, requires constant investment in maintenance, safety, building improvement, and accessibility.

Under the Government's business rate proposals, from April, the theatre faces a projected 30% rise in its business rates bill over the next three years.

With operating costs for utilities, staffing, and insurance rising at twice the rate of revenue, there is little capacity to absorb additional fixed costs. Ticket prices cannot simply be increased without undermining audience accessibility and demand.

The additional business rate burden will inevitably divert essential funds from maintenance and modernisation, reducing flexibility for wider investment priorities, including accessibility enhancements and environmental upgrades that support the theatre’s long-term sustainability.

As costs rise and margins tighten, the risk grows that heritage venues will become less attractive to producers and audiences alike, threatening a cornerstone of the UK’s cultural economy and visitor appeal. For every £1 spent on a theatre ticket, an additional £1.40 is spent locally in restaurants, bars, shops, and transport.

Increased business rates therefore risk weakening the wider ecosystem that depends on the West End’s success.

• Consultation response to the Government's proposed changes to business rates on West End businesses.
• Impact assessment of the upcoming changes and their real economic impact.
• Our Hybrid Business Rate solution which provides an alternative to the way business rates are calculated to provide a fairer system and greater revenue.
• Our business rates specialists met to unpack what it means for your business and to explain how we are taking action on behalf of our members. If you missed it live, you can now watch the full webinar.