Labour criticized for jeopardizing employment by leaving hotels out of support agreement

Travelodge Warns of Rising Costs Due to Business Rates

Travelodge has announced that its business rates expenses are set to climb to £50 million by 2026, a significant increase from £38 million the previous year.

Labour’s Tax Policy Faces Criticism

Rachel Reeves has come under fire for leaving hotels out of her business rates relief plan, a move some say undermines Labour’s economic growth objectives.

Hospitality Sector Voices Concerns

Jo Boydell, CEO of Travelodge, expressed concern that the Chancellor’s decision to focus tax relief solely on pubs could harm other hospitality businesses and limit job opportunities. She emphasized that by prioritizing pubs, the government is overlooking the wider hospitality industry and jeopardizing its own targets for economic expansion and employment.

Boydell highlighted that hotels like Travelodge play a crucial role as major employers and long-term investors in communities throughout the UK, contributing to job creation and skills development.

Impact of Increased Taxes and Wages

The hotel chain has joined the debate on business rates, revealing that higher taxes under Labour, along with rising minimum wages, are expected to reduce its profits by £21 million.

Government Adjusts Support for Pubs

Boydell’s remarks came a day after the Chancellor responded to pressure from publicans, MPs, and The Telegraph by easing the proposed tax increases on pubs. Treasury minister Dan Tomlinson confirmed that every pub in England will benefit from a 15% reduction in business rates for one year, followed by a two-year freeze on their bills. Live music venues will also receive support, as Tomlinson noted their importance alongside pubs.

Exclusion of Hotels, Cafes, and Restaurants

Despite these measures, Labour has faced criticism for not extending relief to cafes, restaurants, and hotels, all of which are also affected by increased business rates.

Government Promises Review

On Monday, Tomlinson stated that the government will review how hotels are valued for tax purposes to ensure the process accurately reflects the sector’s market conditions.

Calls for Broader Support

Boydell urged the government to address the issue and provide tax relief to hotels as well. She warned that higher rates, combined with a lack of tailored support and additional regulatory costs, signal a lack of recognition for the economic contributions of the hospitality sector.

Travelodge reiterated that its business rates bill is set to rise sharply, and the company cautioned that Labour’s Employment Rights Act could further increase operational expenses.

Financial Performance and Expansion

The anticipated rise in costs could hinder Travelodge’s progress, despite the company reporting strong trading in the three months leading up to January, with revenues increasing by 4.3% to £261 million. In 2025, the chain opened 21 new hotels, marking its most ambitious expansion in over ten years.

Boydell stressed the importance of government policies that encourage long-term investment in the hotel industry.

Awaiting Government Response

The government has been approached for comment regarding these concerns.