London and budget hotels could be most affected by the possible business rate rises in 2021, according to the latest business rates research report from JLL.
The commercial real estate services firm said that across the country revenue grew in most areas between the valuation dates for the 2017 and 2021 Rating Lists, and in the 2017 Rating List, hotels accounted for 3.28% of the total with a rateable value of £2.089bn.
The firm said that of this total, 48% (£1bn) lies in London, which could mean a “substantial” rates burden is likely to rise for the 2021 Rating List, leading to operators coming under further pressure to reduce fixed costs and maintain operating profits.
A statement by the firm read: “Local supply situations will impact some areas, such as Heathrow, where a sizable increase in new rooms is impacting revenue growth. This means that, coupled with the fall in the rating multiplier and increasing inflation, the 2021 rating revaluation could be much more benign in the hotels sector than 2017.”