Hopes of Bristol hoteliers that the Autumn budget wouldn’t adversely affect a promising end to 2025 have been dashed by a higher-than-expected wage increase for the under-21s.
While Chancellor Rachel Reeves did announce lower business tax rates for many retail, hospitality and leisure properties, there was no trace of the VAT reduction that the hospitality sector has spent years campaigning for. And the pre-budget announcement that cities like Bristol can now look to introduce ‘Tourist Taxes’ have done little to increase the confidence of hoteliers.
Adam Flint, Chair of Bristol Hoteliers Association (BHA), said: “The final quarter of 2025 for the hotels and city was very buoyant compared to other quarters this year, which was very encouraging. But the Chancellor’s budget has somewhat dampened the enthusiasm we were feeling towards the end of the year. Our members have long supported the calls from trade body UKHospitality for lower business rates, a reduction on VAT for hospitality businesses and changes to National Insurance Contributions for employers.
“The Chancellor did reveal that the government would permanently lower business tax rates for more than 750,000 retail, hospitality and leisure properties, to the lowest rate since 1991, which may offer some relief to some venues, but it’s not nearly enough. If anything, times will become even more challenging for us, thanks to the higher-than-expected increase in the wage rate for 18-to 20-year-olds, adding to the burden of soaring food prices, increased insurance premiums, the recent increase in national insurance contributions and continued pressures of rising energy costs.
“As for the tourist tax, we know that many European cities already have this, but in most of these places, hospitality is taxed at 5% VAT rather than the 20% here. Add to that the Chancellors decision to freeze personal tax thresholds for a further three years, which means disposable incomes will be reduced in real terms, further limiting people’s ability to spend on hospitality and leisure, and they are certainly likely to be deterred from going to places charging the Tourist Tax.
“We would also be interested to know more details, such as who will run the tourist tax and where, exactly, the money it generates will be used. The concern is the monies will be used to fill underinvested areas of local council, rather than supporting new initiatives that benefit the industry. But overall, given the huge contribution hospitality has made to the nation’s economy, this budget has again given us cold comfort as we head into the winter.”
To find out more about the Bristol Hoteliers Association, visit: www.bristol-hoteliers.co.uk
