December Week 1: Independent hoteliers prepare for post-budget price hikes, survey reveals.

According to data from BWH Hotels, some independently-operated hotels anticipate cost increases reaching up to ￡750,000.

Independent hoteliers across the UK are facing a perfect storm of rising costs, with many bracing for unprecedented financial challenges following the latest Budget. A recent survey by BWH Hotels, the UK’s largest collective of independently-run hotels, has shed light on the scale of the issue, revealing that more than a third (36%) of respondents expect costs to increase by over ￡100,000. In some cases, cost hikes could reach an eye-watering ￡750,000.

Rising Costs and Economic Pressure

The survey, conducted among 38 Best Western hoteliers, found that 60% of independent operators are experiencing price increases exceeding 20%, with half attributing these spikes to employer National Insurance hikes. Additionally, nearly a third identified increases in the National Living Wage as a major contributor. These developments come as the hospitality sector grapples with the lingering impacts of the COVID-19 pandemic, rising interest rates, and ongoing cost-of-living challenges.

Tim Rumney, CEO of BWH Hotels, captured the sentiment of many hoteliers, stating:

"The recent Budget has sent shockwaves through an industry that was just getting back on its feet after COVID. These increases not only push up prices but could worsen the customer experience, leaving independent businesses struggling to survive."

Staffing, Rates, and Customer Experience

The financial strain is forcing independent hoteliers to make tough decisions. Over four in five (83%) respondents indicated they plan to reduce staff hours, while 77% reported they would increase room rates and food and beverage prices to offset rising costs.

Robert Smith, owner of the Plough and Harrow Hotel in Birmingham and chairman of BWH Hotels GB, expressed concern about the broader implications:

"Very few hospitality businesses are making enough profit to absorb these hikes. Investment will grind to a halt or stop entirely, and inflation in the supply chain is another unknown that could worsen the situation."

Julie Ashworth, general manager of the George Hotel in Norwich, voiced frustration at government policies, saying:

"The government has failed to consider the devastating impact the minimum wage increase is having on hospitality. It’s driving small businesses to the brink."

Calls for Government Support

The findings highlight the urgent need for government intervention. A majority of respondents (79%) are advocating for a reduction in VAT on hospitality, while 65% called for a new Employer National Insurance Contributions (NICs) band with exemptions for lower-band taxpayers.

Industry leaders are echoing these calls. Kate Nicholls, CEO of UKHospitality, recently warned that the sector faces “18 months of pain” due to the combined effects of rising costs and insufficient policy support.

The Road Ahead

Despite these challenges, BWH Hotels remains committed to supporting its members. Rumney emphasised the importance of preserving the unique identity of independent hotels while navigating financial pressures:

"We are helping hotels drive business and reduce costs, but the pressure on the sector is immense."

As the UK’s independent hoteliers weather this turbulent period, the coming months will be critical in determining whether small operators can adapt and survive or be forced to make irreversible cuts to their operations.

With 230 properties under its umbrella, BWH Hotels stands as a testament to the resilience and ingenuity of independent hoteliers—but the road ahead will require both industry innovation and meaningful government support to prevent further fallout.

Conclusion

The latest Budget has created significant challenges for the UK's independent hoteliers, with rising costs threatening the stability of a sector already under strain. From escalating National Insurance contributions to higher wage requirements, small operators face difficult decisions that could reshape their businesses. With many planning to cut staff hours or raise prices, the ripple effects on both the workforce and customer experience are concerning.

While organizations like BWH Hotels are working tirelessly to support their members, the scale of the financial pressures requires urgent government action. Reducing VAT for hospitality and revising employer contribution bands are steps that could alleviate the burden and allow hoteliers to focus on recovery and growth. Without such interventions, the future of independent hospitality businesses—long celebrated for their unique charm and contribution to local economies—remains precarious.

The resilience of hoteliers will undoubtedly be tested in the months ahead, but with innovation, community support, and hopefully policy reforms, the industry has the potential to weather this storm and emerge stronger.