Hotels were among the hardest-hit businesses at the 2026 revaluation. HM Treasury figures show the median hotel rateable value rose by about a third, and UKHospitality's modelling suggests an average hotel faces tens of thousands of pounds more in business rates over the three years to 2029.
Why hotels were hit hard
- Higher rateable values. Hotels are usually valued by reference to the trade the VOA assumes a reasonably efficient operator could achieve. Strong post-pandemic room rates fed into higher valuations.
- The 40% retail, hospitality and leisure relief ended in April 2026. It was replaced by lower "RHL" multipliers: 38.2p in the pound for rateable values under £51,000 and 43p up to £500,000 in 2026/27. Properties valued at £500,000 or more pay a higher multiplier of 50.8p.
- No pubs relief. The 15% relief for pubs and live music venues in 2026/27, and the larger cut announced for 2027/28, do not apply to hotels, guest houses or restaurants.
Is your valuation right?
The valuation is notional. Only you hold the real figures: occupancy, average room rate, food and beverage takings and costs. Comparing those with what the valuation implies is the heart of a challenge.
Things worth checking:
- The number of letting bedrooms and function spaces the VOA has recorded
- Whether your actual trade over the period the valuation was based on supports the figure
- How your valuation compares with similar hotels nearby, using the rating list search
Questions
Do hotels get any business rates relief in 2026/27?
Hotels pay the lower retail, hospitality and leisure multiplier where their rateable value is under £500,000, and may get transitional relief, which limits how fast bills rise. They don't get the pubs and live music venues relief.
Is the government reviewing how hotels are valued?
Yes. HM Treasury is reviewing how pubs and hotels are valued, with findings due by the end of March 2027. Any change is expected to apply from the next revaluation in 2029, so it doesn't fix an overvaluation on the current list.
How much could a hotel save?
It depends entirely on the evidence. As an illustration, a 10% reduction on a rateable value of £150,000 at 43p would cut the bill by about £6,450 a year before transitional relief. Many challenges don't succeed.