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Hotel owners and operators face unique challenges in managing their properties, including the significant financial impact of business rates liabilities. Specialist skills are critical to evaluating a hotel to ensure a fair representation from the appraisal of the market’s perception of trading potential, the competitor influences at a micro and macro level along with other essential indicators.

 

Whether you are looking to reduce your costs, improve your cash flow, or simply stay updated on the latest regulations, we are here to support you every step of the way. We offer a comprehensive range of services, from business rates audits and appeals to ongoing rate management and compliance support.

IMPACT OF REVALUATION 2023 ON HOTELS

The 2023 Revaluation came at a particularly sensitive time for hoteliers and provided an opportunity for Rateable Values to be recalibrated to properly reflect market changes since the last revaluation.

Revaluation 2023

For hotel ratepayers, the 2023 Revaluation is arguably the most important rating revaluation for 20 years. It was also the most challenging from a valuation perspective, given both the ebbs and flows of trading performance since the last revaluation in 2017, with massive increases in operational costs, a recruitment crisis, the pandemic, a cost-of-living crisis putting a strain on discretionary spending.

 

Overall, hotels fell in England and Wales by 12% from April 2023, but rose in Scotland by 3%.  There was a wide range in those movements, with those hotels most impacted by the pandemic, such as city centre and airport locations, seeing the largest falls while staycation locations saw the least fall.

 

There are opportunities to mitigate rates liabilities by identifying the above factors along with identifying Material Changes of Circumstance (MCCs), such as new competition and disturbances near the property.

Hotel Valuation Frameworks

Hotels have been valued by reference to trading potential as is the case for all types of hotel valuations. There are agreed frameworks of valuation that have ensured assessments have been kept as fair as possible under the rating regulations. The frameworks have been driven by detailed analysis of trading accounts reflecting not only total revenues, trading profiles and Revenue Per Available Room (RevPARs) but also costs and allowances for items such as repairs and maintenance, renewals funds, head office costs and tenant’s share of profits.

 

The agreed frameworks are a major step forward in ensuring rates liabilities for hoteliers have, in many cases, been kept to a minimum, but strong negotiations of individual cases within the frameworks are vital. Gerald Eve reported to and received the approval of the UKHospitality, who we represent, before formal agreement of the valuation basis with the Valuation Office Agency (VOA). It is now the individual valuations we are focusing on.

 

Bed and breakfast style hotels are valued on a different basis whereby a rate per room type is applied.

 

Scottish hotels are dealt with by the Scottish Assessors Association, who did not reach an agreement with us ahead of the current rating roll. This means we are negotiating the basis that should be applied to our clients’ assessments with the Assessor.

 

Regulatory compliance

England and Wales

 

Non-Domestic Rating Act 2023

 

The Non-Domestic Rating Act 2023 will introduce potentially onerous mandatory obligations on ratepayers to regularly update the tenure and physical details of all properties within their portfolios with the Valuations Office Agency (VOA).

 

Increasing the administrative burden on businesses, it will require prompt updates to the VOA and annual returns even where there are no changes, with penalty risks for non-compliance. The complexity of business rates management will increase with measures anticipated to be fully in place for the 2026 Revaluation.

 

Material Change of Circumstance (MCC)

 

Legislative changes to Material Change of Circumstance provisions took immediate effect in October 2023. They tighten the scope of MCCs in England so that new legislation, licensing regimes and guidance from public bodies will not be grounds for a change in Rateable Value between revaluations.

 

Completion Notices

 

For buildings that have been temporarily removed from the rating list during redevelopment, billing authorities will be able to issue Completion Notices in the same way as for a new building. The regulatory changes should be in effect from January 2024.

 

Scotland

 

Since January 2023, Scotland’s new legislation has transferred Valuation Appeals to the Scottish Courts Tribunal service. This entails strict deadlines and rigorous requirements for ratepayers and advisors. All appeals against valuations from April 2023 should have been submitted as a comprehensive case with supporting data by 31 August 2023. Learn more about how to appeal business rates in Scotland >

How we can help

We understand that business rates can be a complex, costly and challenging area for hotel operators to navigate. Our team of hotels business rates experts has extensive experience in the hotel industry and is committed to providing you with tailored advice and guidance to manage your business rates liabilities effectively. Whether you own a single boutique hotel or manage a portfolio of international luxury resorts, our bespoke service is designed to align to your specific needs. Discover below how we can assist you.

  • Complementary Health check

    We will always provide an initial review of your rates position. This allows us to identify risks, opportunities and ensures you are happy to proceed fully aware of what to expect when it comes to understanding business rates.

  • Review and Appeal

    When your Rateable Value looks excessive, we review and start the initial process of appealing your assessment. This review includes several methods used to ensure you always pay the correct business rates bill. We know when to challenge and when to leave well alone. This insight and our forensic attention to detail translate into successful appeal strategies.

  • Budgeting and Forecasting

    Our budgetary advice allows clients to understand their current and future liabilities on existing and new sites as well as new technologies. Our financial forecasts can be high level and more detailed as required and are regularly updated to reflect changes in budgetary assumptions resulting from government announcements and pending revaluations. This ensures that investment decisions are made on sound budgeting advice and track of your risk and exposure at any given time.

  • Disturbances and Deletions

    Undergoing building works to your property? We aim to reduce your rates during the duration of any works you carry out. If you find yourself next to a building site, road works, scaffolding over your property or any other disturbance, we aim to secure a reduction in your rates during the length of the works.

    As well as dealing with disposals, demolitions and temporary disturbances, we also work with Valuation Officers and Scottish Assessors to manage and, where possible, ‘prior-agree’ alterations to assessments to reflect new buildings and other estate changes.

  • Exemptions and Reliefs

    Properties are entitled to different exemptions and relief based on certain criteria. Reliefs and exemptions can be difficult to navigate and understand. We make understanding your entitlements easier by reviewing each of your properties to ensure you receive your relief and exemptions, if applicable.

  • Vacant Properties

    Vacant property can be expensive to run and difficult to maintain and secure. We advise and manage empty rates mitigations schemes for you. We advise you on the best way to mitigate your rates liability depending on your circumstances and goals.

  • Historic Rates Audit

    Overpayments made against business rates assessments can easily go unnoticed. Our historic rates audit ensures that past errors and overpayments are resolved and refunded in a timely manner. We also meticulously track and trace any properties you have disposed of to see if you are owed any refunds.

  • Rates Payment Management Service (RPMS)

    We remove the hassle of multiple payments across all of your properties. We provide you with one monthly payment request; we then take care of the rest paying individual councils on your behalf. This minimises errors, enforcements and bailiff actions.

Client testimonials

What some of our clients say about working with us.

Gerald Eve provide our business with a highly efficient business rates service. Their approach is friendly, proactive and shows attention to detail - this has directly led to significant financial savings. They have a real understanding of the ways to pursue opportunities and provide timely advice essential for business planning, budgeting and forecasting.

Emma Flynn, Operations Finance Director, LGH Hotels Management Ltd

I have worked in Senior Finance in the Hotel sector for 30 years and during that time Gerald Eve have been advisors to the various companies for whom I have worked. Within the last ten years, Partner Rob Birtles has taken on our account and has advised on the numerous properties within our collection.

I value enormously Rob’s advice, guidance and professionalism when it comes to all matters business rates and his knowledge and experience in this area is second to none. I not only view Rob as one of our professional advisors, but see him as a partner and extended colleague to our business. Experts in their field, I have no hesitation in recommending Gerald Eve and in particular Rob, to any hotel business seeking to reduce their business rates liability.

Carl Stockden, Group Director of Finance, The Celtic Collection and ICC Wales

I have worked with Gerald Eve’s hotel rating team for many years as they are the best in the business. They are reliable, proactive and professional, finding innovative and timely solutions for me. We look forward to relying on their services for years to come.

Gary Hall, Finance Director, Harbour Hotels

Ennismore’s Sanderson and St Martins Lane hotels were supported for about two decades with great business rates success. Over the years, the hotels have seen significant savings / refunds and we are very grateful for the ongoing close support of the Gerald Eve hotel rating team. We have extended our relationship with Gerald Eve to include the Mondrian Shoreditch hotel which opened in August 2021 and look forward to a long-lasting successful future together.

Ralf Albus, Regional Finance Director, Ennismore

The De Vere group has worked with Gerald Eve’s hotel rating team for many years. They are trusted advisors to the group who provide timely, reliable and value-adding advice that helps us manage our business rates. They remain our go-to advisors for all matters relating to business rates.

Mike Craig, Group Head of Finance, De Vere Group

Why us

Gerald Eve is one of UK’s largest and most experienced rating teams, with a dedicated Partner-led team specialising in the hotel sector. We represent over 50% of corporate hotels with savings to our hotel clients alone at over £130m in the 2017 Rating List. We have already negotiated on behalf of the hotel sector to establish fair bases of valuation for business rates. You can trust us to handle your hotel business rates needs with precision and expertise.

Specialised Expertise

At Gerald Eve, we offer a unique advantage with a dedicated Partner-led team specialising exclusively in hotel business rates valuations. Unlike other firms, we focus solely on the hotel sector, ensuring you receive specialised knowledge and insights tailored to the complexities of the hotel sector.

Industry influencer

As the retained adviser to the UK Hospitality Association, we are recognised to have a deep understanding of the nuances of the hotel sector. Our extensive experience includes negotiating the bases of valuation since 1990 and advocating on major issues affecting the sector. This knowledge uniquely positions us to minimise your rates liability effectively.

Proactive and informed

We proactively represent our clients in negotiations with the Valuation Office and Scottish Assessors, leveraging our substantial market intelligence for added authority. Our regular industry contact and confidentiality ensure we identify and act upon every significant change of circumstance, providing you with prompt and reliable support.

Our clients

Here are just a few of the clients we work with.

Key Facts

9.3bn

total Rateable Value handled

£1.3bn

client savings since 2017, £3.8 bn since 2010

25%

of the FTSE represented

£1bn

rate liability processed each year as UK's leading outsourced ratepayer

Key contacts

Rob Birtles

Partner
Business Rates
London – City

Daniel Rigby

Senior Associate
London – City

Martin Clarkson

Partner
Asset Valuation & Advisory
Glasgow

Revaluation 2023

Many businesses may have an opportunity to reduce their business rates liability. Are you one of them?

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