A hotel chain boss has urged Jeremy Hunt to reform business rates to make the system fairer and more flexible.
Lionel Benjamin, co-founder of AGO Hotels, told Express.co.uk, said the rates system needs an “urgent revaluation” to make it correspond to the realities of running a hotel.
He said: “The Government now needs to reform the business rates system by introducing temporary reductions in business rates during off-peak seasons, enabling businesses to manage their cash flow more effectively.
“For the hospitality and tourism industry and the wider economy this current system is another significant hit on UK PLC.
”An alternative is for business rates to be performance-based, requiring a digitised system which can feed in from real data submitted by occupiers of properties.”
He said hotels facing rising costs are trying to pass on their costs to customers with increased prices.
The businessman said: “As money has become tighter for people, those booking a staycation in the UK will want to make sure they get the best experience.
“Affordability and service will remain the most important factors, and this will be on the minds of anyone owning and running a hotel.
“From the moment the guest books, to the time they check out, in a competitive market, guests will be looking for a reason to choose one hotel over another.
“In times when businesses and employees are stretched, it will be key to remember everything comes back to the guest experience.”
GDP figures for the fourth quarter of 2023 showed consumer-facing services recorded a 0.7 percent fall, despite growth in the accommodation sector, especially hotels.
Mr Benjamin said the move to working from home has had an impact on the sector.
He explained: “Within the corporate sector, the significant uplift of working from home has impacted hotel occupancy.
“Some hotels in commercial locations benefit from additional midweek stays, the broader impact is a decline in demand.
“The combination of the cost-of-living crisis and work from home has seen an increase in availability, and Q1 2024 is more in line with Q1 2019 and the pre-pandemic business levels.”
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