BWH Hotels GB Responds to Autumn Budget
Tim Rumney, CEO of BWH Hotels GB, Britain’s largest group of independent hotels:
“Today’s Budget is a missed opportunity to reverse the damage done to a sector that has lost 89,000 jobs in nine months - three times the rate seen in the wider economy.
“A ‘tourist tax’ might look like an easy way to raise revenue, but in reality it risks undermining the very hospitality and tourism businesses that keep our economy vibrant.
“At a time when operating costs are already extraordinarily high, adding another charge on top of our 20% rate of VAT will punish both visitors and local businesses. This is a move that will do more harm than good to the industry and risks ultimately deterring visitors and costing the public more than £500 million.
“This is a levy that will be applied to all hotel stays - whether that’s UK residents booking a hotel in order to attend a hospital appointment, or to visit family - it’s not just applied to tourists visiting the UK.
“All independent hotels in the UK already operate in a highly competitive environment. If the total taxation rate is substantially more than our European competitors it will only make UK hotels less competitive and drive down revenues.
“While European rivals support their hospitality industries with VAT rates of 9-13%, UK operators pay the full 20%. Ireland just permanently reduced theirs to 9%. A reduced VAT rate here wouldn't just protect jobs - UKHospitality's modelling shows it could deliver a net fiscal gain of £4.6 billion to the Treasury over ten years through stimulated demand.
“UKHospitality’s recent survey shows the grim reality: a third of businesses now operate at a loss, 76% forced to increase prices, 63% cutting staff hours and four in ten reducing investment. Opening hours are being restricted and growth has stalled.
“The increase in the National Living Wage of 4.1 per cent and of the minimum wage for 18-20 year olds by 8.5% announced today will add even more pressure to a sector still reeling from decisions made in 2024.
“Last year’s employer NICs changes hit independent hotels the hardest. Extending exemptions to young people and those returning from welfare would support job creation while reducing the benefits bill.
“The sector doesn’t want handouts - we want a fair tax environment to get back to growth. We create jobs across the country, not just in major cities but in towns and coastal communities. Give us a level playing field and we’ll do what we do best: create employment, welcome visitors and keep Britain thriving.”
Key Statistics:
89,000 hospitality jobs lost since last Budget (three times wider economy rate)
Hospitality typically creates 26,000 jobs annually
Sector pays up to 75% of pre-tax profit in tax - highest of any industry
One third of businesses operating at a loss
EU average VAT on hospitality: 10-13% vs UK’s 20%