Beyond business rates relief: we need to fashion a call for a more resilient hospitality sector

Beyond business rates relief

The hospitality sector eagerly awaited Chancellor Jeremy Hunt’s Autumn Statement on 22 November, specifically as to whether there would be an extension of business rates discounts. Unanimous sighs of relief were heard countrywide across pubs, restaurants and hotels when it was announced that the 75% rates relief would be extended until April 2025. 

The extension of this relief for another year, constituting a £4.3 billion lifeline, is a welcome decision for an industry that has weathered unprecedented challenges in recent years. There was also good news for smaller hospitality businesses, as the small business multiplier rate was frozen at 49.9p. The standard multiplier rate however will be uprated in April from 51.2p to 54.6p. Many were also hoping for the lowering of VAT from 20% to 10% but they were disappointed. 

Unfortunately, Hunt’s statement did not come with any good news around the VAT rate, which will remain at 20%. 

So, following this, an emerging theme has become clear. The sector agrees it cannot continue to rely on solely relief measures and we need to fashion a hospitality sector that has a sustainable, long-term future.  

Working towards a more permanent solution

Temporary relief is welcome, but the rates relief that is being provided is temporary for a reason. Although it will provide a reprieve to business owners who have been struggling, it is not a solid fix for many of the deeply rooted issues that the sector faces

The hospitality sector by its nature is unique. Bars, pubs, hotels, cafés, and restaurants are all subject to significant fluctuations in demand due to seasonality and other external forces. Can the sector play this to its advantage in any way? How can businesses be incentivised to get their own houses in order?  The struggles that a local corner pub faces are significantly different to that of a large hotelier. In addition to this, independent businesses face entirely different hurdles to chain competitors. It is important that this is recognised and reflected in any future schemes that look to support the sector. 

Hospitality is key to the UK’s identity, contributing a substantial £93bn to the nation’s GDP and is integral to the country’s appeal to tourism. Currently, with the minimum wage, food and beverage, and energy costs all rising, creative and innovative ideas are needed to make sure British people and overseas visitors alike can continue to enjoy the UK’s hospitality experience. 

Future-proofing our hospitality businesses 

Thinking longer term, more measures that rewards those who invest in more sustainable practices, employee wellbeing and community engagement would be a welcome reform. We need to incentivise those who adopt innovative technologies, excel with fair employment agreements and who provide a benefit to their local communities – private schools allow local community use of their facilities partly in return for charitable status and perhaps hotel owners might similarly benefit.

This could be implemented by providing grants for businesses that prioritise environmentally friendly practices, the adoption of technology, and who participate in active engagement with their  local communities. 

Putting further resources into Government-funded assistance and training programmes could also support business owners to further educate themselves and their employees. This can help with the introduction of new revenue making streams into hospitality businesses. For example, employees and teams that can coordinate collaborations and partnerships or organise pop-up events or deliver branded merchandise. 

As we move forward, let us aspire to build a hospitality industry that not only weathers the storms of today but also thrives in the face of the future challenges of tomorrow. A willingness to adapt coupled with strengthened Government support can ensure that the UK’s hospitality sector experience remains vibrant, accessible, and still integral to our national identity.