Paul Callingham, executive chairman of Starboard Hotels (owner of the Bridge Hotel in Greenford and the Hampton by Hilton London Park Royal), outlines his concerns that a tourist levy could be introduced for hotels in London and across the UK, and what it could mean for hotels and their guests.
“Since coming to power the current government have destroyed many hospitality businesses, others are hanging on by a thread.
“Starboard Hotels owns and operates 21 hotels throughout the country, including two hotels in the borough of Ealing, the 68-bedroom Bridge Hotel in Greenford and the 162-bedroom Hampton by Hilton Hotel in Park Royal. We employ nearly 500 people nationwide.
“It was announced prior to the Chancellor, Rachel Reeves, Autumn Budget speech that the Government will allow local mayors to impose a tourist levy on the overnight stays of people visiting their jurisdiction without any control on how the money is to be spent. This is a disastrous direct tax on hotels.
“We will need to include the levy in our published room rates to comply with the Digital Markets, Competition and Consumers Act 2024 which prohibits ‘drip pricing’, i.e. by the hotel adding the levy to the bill at check out.
“As such, guests will not pay extra as our rates are market driven, but this will be an increased burden on hoteliers at a time when the industry is already under pressure. So, just like VAT, the guest will see an inclusive price! To add insult to injury, the commission that we pay to third party booking agencies such as Booking.com charge their commission on the gross room rate, so we will be pay commission on these levies!
“This has not been thought through and we will probably see different rates all over the country which for a business like ours will be hard to manage. There is also no restriction on what these levies can be spent on. If the money is used to help attract visitors into their area, then it could be supported; however, most authorities will use the money to prop up their budgets.
“I suspect it will be impossible for local authorities to collect this levy from holiday let businesses, especially individual Air B&B landlords, so it will continue to be hoteliers who bear the burden.
“What came to light after the budget, after the Chancellor proudly announced the reduction in the business rate payable by hospitality, is that most hotels and other hospitality businesses saw a dramatic increase in their 2026 ratable value revaluation.
“The Valuation Office Agency (VOA) revaluates the rateable value of business properties to reflect changes in the property market. The most recent revaluation will come into force 1 April 2026.
“In one hotel, our rateable value was increased from £250,000 to £780,000! A rise in rates payable of nearly £300,000 a year! In Park Royal our rates payable will increase by £80,000. Premier Inn estimate that they will be paying an extra £50M in business rates next year! These costs are on top of the increase in living wage, plus the National Insurance increases imposed in last years’ budget. These rises do not only affect our businesses, they also our suppliers, which increases our costs further.
“Our hotel room rates are market driven, so if we try and increase our room rate to help combat these rises, the customers will go elsewhere or just not travel. This is a creating a crisis for the whole industry, which is a vital part of the UK’s economy, the Government must re-evaluate their policies immediately and stop kicking hospitality while it is already down.”
