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Watch HVS' latest webinar on the impact of Regulation and Policy on the UK Hotel Sector

16 December 2024

Our 22nd webinar, held on 10 December, explored the impact of the 2024 Budget on the hospitality sector, highlighting concerns about increased costs from rising NI contributions and thresholds, minimum wage increases and business rates, with one of our experts noting that these changes could lead to a 10% increase in payroll costs, necessitating a 5%-7% revenue growth to mitigate the impact.

The discussion also covered the potential for a tourist tax in the UK, as has already been mooted for Edinburgh, with concerns expressed about its impact on demand and competitiveness and the need for strategic planning, technology adoption and collaboration with government to navigate these challenges and maintain sector growth.

The scene was set by our two keynote speakers. Kate Nicholls OBE, CEO of UKHospitality, struck a note of concern, saying, "Growth is projected to hold steady amid weakening prospects and rising threats. The world needs a shift in policy gear, there are opportunities… and risks all around us." Meanwhile, Racheal Farrington, Head of Tourism Affairs at VisitBritain, highlighted the issues from the consumer’s point of view, noting that “the cost of accommodation is seen as the biggest barrier to people taking domestic trips.”

The research used by Rachael Farrington in her slides can be downloaded at the UK Domestic Travel Sentiment Tracker at VisitBritain.

The panel, chaired by our chairman Russell Kett, then expanded the discussion. Ed Odell, Director at Flint Global, observed that the government's approach to costing is very static. “It says ‘if we do this, it will cost a billion’. But what does it mean in terms of tax take in terms of hotel VAT, for example, because no tourist comes and just buys things and leaves?"

In conclusion, there was consensus that ADR, RevPAR and property values would most likely rise slowly, influenced by inflation and cost increases.

Organization

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