Hotels giant Travelodge has warned that recent Government policies have made trading conditions “more challenging” after the sector missed out on fresh business rates relief.
In a trading update a day after the Treasury announced additional tax relief for pubs and music venues, the budget hotel chain’s boss Jo Boydell said the move was “neglecting the broader hospitality sector”.
“Higher rates and a lack of bespoke support, together with wider regulatory cost increases, sends the message that the Government does not understand the economic value that our sector delivers,” she added.
Travelodge said its business rates bill is set to increase from £38 million over the past year to £50 million a year in 2026 due to changes coming to force in April, with “further significant rises” in the following years as transitional relief measures are phased out.
Trade organisation UK Hospitality warned that hotel business rates are set to increase by 115% by 2029 after changes to the commercial property tax announced in November’s Budget.
The Treasury introduced a lower multiplier used to calculate business rates but this was more than offset by the removal of a Covid-era 40% discount to business rates bills for hospitality, leisure and retail businesses, as well as new property valuations.
Transitional reliefs were unveiled to manage increases to rates bills over the next three years after the removal of sector discounts.
However, on Tuesday the Government said pubs and live music venues in England will benefit from 15% off their business rates bills from April through fresh support after warnings over potential closures and job losses.
Travelodge also warned that other Government policies, such as higher employment costs linked to an increase in the national living wage and “new regulatory requirements”, are also headwinds weighing on the growth of the sector.
It came as the 625-strong hotel business reported that group revenues increased by 0.7% to £1.04 billion for the year to December 31 2025.
This was supported by a “good” performance in the final quarter of the year, which saw revenues lift by 4.3% to £261 million.
Travelodge said it was buoyed by improved trading conditions in the UK as it benefited from events such as World Travel Market in London’s Excel and sports fixtures, including England’s autumn rugby international against Australia at Twickenham.
