What the 2025 Budget Means for Hospitality?
What the 2025 Budget Means for Hospitality — and Why Short-Let Operators Should Care
The UK Autumn Budget 2025 has just landed — and while that usually comes with hope, this time the hospitality sector is sounding the alarm. What was billed as relief for pubs, hotels, leisure and accommodation businesses has left many operators worried that a so-called “stealth tax” may be hiding behind the headlines.
Here’s what’s happening — and why you, running short-lets, holiday-lets or small-scale accommodation, should be paying attention.
What’s supposed to help: business-rates relief and support promises
- The government announced permanently lower business-rates multipliers from April 2026 for retail, hospitality and leisure (RHL) properties — described as the lowest multiplier in decades for many eligible properties.
- For small- and mid-size operators, this could mean reduced rates bills and a bit of breathing room — especially helpful in uncertain times. >>>
For many, this sounded like the lifeline the sector needed after years of turbulence.
What “relief” really looks like: why many call it a stealth tax
But the picture is far from rosy: according to industry bodies and operators, the relief falls short.
- Wage increases and steeper employment costs (via higher minimum wage, NICs etc.) are biting deeply — many businesses argue the small business-rates cut won’t offset these additional burdens.
- As a result, the net effect could still be rising costs, shrinking margins and forced price increases — even closures in some cases.
- According to The Caterer, some operators had already started warning about the necessity to raise prices and re-think efficiency and labour costs.
In short — what was sold as a “support package” may end up squeezing many businesses harder.
What this means for short-lets, holiday-lets and small-scale hosts (like MyShortLets)
Even though the headlines target pubs, restaurants and hotels — these changes ripple into any accommodation-based business, including short-lets and holiday-lets. Here’s how:
- If you treat your property as a commercial/leisure asset, revaluation could increase your business-rates burden after 2026.
- Rising costs (wages, utilities, maintenance, property tax) may force you to reconsider pricing — possibly pushing up nightly rates, which could reduce competitiveness.
- Maintenance and running costs may climb, cutting into your margins — especially in slower periods.
- On the flip side: if your property is modest and qualifies under the lower multiplier, there’s a chance for some cost savings — but that’s a narrow window.
What you can do — practical steps for MyShortLets hosts
- Check your rateable value and projected business-rates multiplier — to know if you qualify for the discounted rate.
- Stress-test your financials — build in higher costs (wages, maintenance, utilities, cleaning) and project different occupancy/season scenarios.
- Consider flexible pricing models — seasonal pricing, dynamic rates, or shorter lets might help absorb cost shocks.
- Be transparent with guests about pricing changes — if nightly rates shift, honest communication helps maintain trust.
- Monitor sector updates and support schemes — changes may evolve, or local support might become available.
Final word: proceed — but with eyes open
Yes — there’s a small glimmer of support for hospitality from Budget 2025. But what’s on paper doesn’t always match reality. For short-let and holiday-let operators, the coming months could be a minefield.
This isn’t the moment to celebrate — it’s the moment to plan. Brace for rising costs, stress-test your business model, and make your properties as resilient as possible.
