The April Reckoning

1 April 2026 will be remembered as one of the most consequential dates in modern UK hospitality policy.

Two seismic changes hit simultaneously. The end of business rates relief. A £1.4 billion wage bill increase across the sector. For many operators, this is an existential moment.

What's actually happening

Business rates. The COVID-era RHL relief scheme ends. Yes, we get a new lower multiplier at 43p. But rateable values for accommodation properties have jumped 76% on average. Properties with RVs over £500k face a 50.8p rate.

For many hotels, particularly in prime locations, the net effect is a massive increase in property tax liability. The relief isn't relief. It's a restructuring that benefits some and hammers others.

Wages. National Living Wage rises to £12.71/hour. The 18-20 minimum wage jumps 8.5% to £10.85. These aren't small adjustments. This is a structural reset of the cost base.

And this is just April. The Employment Rights Act phases in throughout 2026. Day 1 parental leave rights. The Fair Work Agency. Mandatory tipping consultation by October.

Where is the policy coherence?

My question for policymakers: where is the joined-up thinking?

The government is simultaneously increasing the cost base through wages, enforcement, and compliance while removing support through rates relief changes and considering new demand-dampening measures like tourist taxes. Meanwhile, our European competitors enjoy VAT rates as low as 7%. We're stuck at 20%.

I'm not arguing against fair wages or worker protections. I'm arguing for policy that recognises the economic reality of our sector.

We operate on thin margins. We're labour-intensive. We're capital-intensive. We're critical to the UK's international competitiveness as a destination. Treating hospitality like just another retail category fundamentally misunderstands what we are and what we contribute.

What good policy would look like

Recognise that hospitality is a strategic sector. Tourism contributes £237 billion to the UK economy and supports 4 million jobs. Policy should reflect that significance.

Balance worker protections with business viability. Higher wages are supportable if productivity can improve. But that requires investment. Investment requires margin. The current policy mix is squeezing both simultaneously.

Provide a stable, predictable tax environment that enables investment. The constant churn of rates relief, removal, restructuring creates uncertainty that chills long-term capital deployment.

Support demand generation, not suppress it with new taxes. A visitor levy might generate short-term revenue for local authorities. It also makes UK destinations less competitive against European alternatives.

What operators should do now

Immediate. Review your new rateable values before 31 March. Appeal if excessive. Many will be. Model the cash flow impact. Update your budgets and pricing strategies.

Strategic. This is a forcing function for operational transformation. We cannot price our way out of this. We need to fundamentally improve productivity, automate where possible, build businesses that generate real profit.

Collective. Engage with UKHospitality and industry bodies. Policy is made by those who show up. We need a unified, credible voice making the case for a hospitality sector that can invest, grow, and compete.

The path forward

For some operators, this will be the moment they finally address structural inefficiencies they've been avoiding. For others, it will be the moment that tips an already struggling business over the edge.

The difference comes down to preparation, execution, and willingness to fundamentally rethink how these businesses operate. The old model of high labour intensity, low productivity, and margin from volume is being legislated out of existence.

The new model is still being written. Technology. Automation. Ancillary revenue. Relentless focus on profit per guest rather than heads on beds.

I know which outcome I'm working toward.