Surinder Arora: Hotels should not be excluded from tax relief
Hotel tycoon Surinder Arora has said he “fails to see” why the government has offered emergency tax support only to pubs, as hotels battle with “unprecedented” business rate hikes.
This comes after Wednesday’s Consumer Prices Index (CPI) figures revealed that hotels and restaurants are facing far quicker price rises than the headline inflation rate.
The billionaire founder of hotel chain Arora Group told Morning Wire: “Hotels are facing a wave of increased costs from unprecedented hikes in business rates, increased staff costs and ever rising energy prices.
“These are just some of the problems we face and help to explain why inflation has risen across the hospitality sector despite inflation dropping in the economy overall.”
Hotel and restaurant inflation climbed from 3.8 to 4.1 per cent for the year to January despite a falling headline CPI rate, and an Investec briefing said this rise prevented the top-line figure from falling further.
Allen Simpson, chief executive of trade body UK Hospitality, told Morning Wire on Wednesday that pubs, bars and restaurants will likely be forced to pass rising costs onto consumers despite easing overall inflation.
“If the government wants hospitality to continue creating jobs and driving growth in communities across the UK, it must act to reduce costs, particularly by reforming business rates and ensuring wage policy is balanced with the sector’s ability to absorb rising costs.”
Arora: Pubs not alone in battling business rates
Following a bitter row over changes to the business rates tax at November’s Budget, Chancellor Rachel Reeves was forced to announce a £300m emergency relief package in January.
But the decision to limit this support to pubs and live music venues was met with outrage by hoteliers and restaurant owners.
Reflecting on Wednesday’s inflation figures, Arora told Morning Wire the government should address the high cost burden facing the entire hospitality sector.
He said: “We welcome the government recognising the negative impact of business rates on pubs but fail to see how they are looking at pubs in isolation and not the hospitality sector as a whole, given hotels and restaurants have the very same issues.
“Our objective is to run as efficiently as possible across our hotel portfolio but external factors make this ever more difficult.”
Figures released on Tuesday revealed rising joblessness in the UK, prompting concerns among economists that low-paid roles popular among young workers, such as those in hospitality, are receding the quickest.
HMT has been contacted for comment.