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Whitbread chief executive Dominic Paul has called the last two Budgets the most unfriendly to hospitality the industry has seen, citing higher business rates, wages and employer National Insurance costs. The company says its business rates bill is on course to double to £200 million by 2028, while the government’s next steps on hotel rates and National Insurance remain unclear.
Whitbread chief executive Dominic Paul has described Labour’s last two Budgets as the most unfriendly to hospitality the industry has ever seen, renewing calls to reverse employer National Insurance changes and curb planned hotel business-rate increases. His comments put the cost burden on hotels back in focus as Whitbread says its rates bill is set to double to £200 million by 2028.
Paul said hotels had faced business-rate increases alongside wage rises and higher employer National Insurance payments. He said those costs were making it harder for Whitbread to create jobs, and argued that rolling back the National Insurance changes would help the company expand employment, including for young people. These are the company chief’s assessment and policy requests; the report does not provide an independent breakdown of how much each measure has added to Whitbread’s costs.
Whitbread has asked ministers to freeze planned hotel business-rate increases over the next two years. Paul said the company supported the government’s stated aims of economic growth and job creation, but argued that hospitality businesses needed help with costs to contribute to those goals. The company’s half-year profits were also affected by restructuring costs following last year’s tax rises, according to the report.
The report says Whitbread’s profit for the six months to August 27 fell 62 per cent to £109 million. Strong sales were offset by restructuring expenses and higher costs. In April, Whitbread announced plans to close its restaurant business, putting up to 3,800 jobs across the UK and Ireland at risk, and said it planned to sell and lease back £1.5 billion of freehold properties.
Hotel Costs and Whitbread Jobs
The dispute matters beyond Whitbread because business rates and employment costs affect the operating expenses of hotels and their capacity to recruit. Paul’s warning links tax and rate policy directly to the company’s plans for job creation, while the company’s restructuring shows how cost pressures are being addressed inside one of the UK’s largest hotel groups. The source does not establish that the Budget measures alone caused the job risk or profit decline.
Hotels are also raising concerns about a proposed visitor levy, which would charge people staying overnight. Paul argued that it would add another tax on visitors and questioned how the proceeds would be spent. The levy’s design and application were not detailed in the report, so its likely cost to guests and operators cannot yet be assessed from the available information.
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Whitbread’s Restructuring and Rates
Whitbread operates more than 850 hotels in the UK and Germany, including Premier Inn. The company’s calls on rates come amid different treatment for hospitality businesses: the report says pubs and live music venues have been promised lower business-rate bills from next spring, while hotel bills are expected to rise over the coming years.
Whitbread is also facing pressure from investor Corvex, which holds about 6.4 per cent of the company. The hedge fund wants Whitbread to separate its hotel operations from its property assets. Paul urged investors to reject Corvex’s attempt to secure a board seat, calling the fund’s position not credible and a distraction. The report says Corvex had previously urged a sale process, then later said it was not demanding a sale. That shareholder dispute is separate from the company’s policy complaints, though both concern Whitbread’s future direction.
“The most unfriendly budget to hospitality that probably the industry has ever seen.”
— Dominic Paul, Whitbread chief executive
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Policy Changes Still Unsettled
The report does not say whether the government will alter employer National Insurance policy or freeze hotel business-rate increases. It also does not give the detailed timetable or final terms for the proposed visitor levy, including how much it might charge or how its revenue would be allocated. Whitbread’s £200 million rates bill is a projection for 2028, not a reported bill already paid at that level.
It is also unclear how much of Whitbread’s profit decline reflects restructuring, wage and tax costs, or other factors; the report says strong sales were offset by restructuring costs and higher costs but supplies no detailed breakdown. The stated 3,800 job figure describes roles at risk from the restaurant closure plan, not confirmed job losses.
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Budget Decisions and Company Plans
Whitbread is pressing for hotel-rate support ahead of the upcoming Budget, while seeking a reversal of employer National Insurance changes. The government’s response, and whether hotels will receive relief comparable to the measures reported for pubs and live music venues, will determine whether the company’s requests lead to policy changes.
Investors are also being asked to decide whether Corvex should gain a seat on Whitbread’s board. The report does not specify the timing or outcome of that vote. Whitbread’s restaurant closure and property sale-and-leaseback plans remain relevant to its costs, workforce and longer-term business structure.
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Key Questions
What did Whitbread’s chief executive say about the last two Budgets?
Dominic Paul said they were the most unfriendly to hospitality the industry had ever seen, citing business rates, wage increases and employer National Insurance costs.
How high is Whitbread’s projected business-rates bill?
The report says Whitbread expects its business-rates bill to reach £200 million by 2028, double its current level. This is a company projection, not a bill already incurred at that amount.
What changes is Whitbread seeking?
Whitbread is calling for employer National Insurance changes to be rolled back and planned hotel business-rate increases to be frozen or reduced.
Did Whitbread confirm 3,800 job losses?
No. The restaurant closure plan was reported as putting 3,800 jobs at risk across the UK and Ireland. The source does not say that all those roles have been cut.
What is the status of the proposed visitor levy?
The report says Paul criticised government proposals for a levy on overnight stays, but does not give final details on its rate, scope or how revenue would be spent.
Source: rss
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