Whitbread CEO Dominic Paul has scrapped plans for new UK hotel sites due to higher business rates, citing an additional £100 million ($132 million) in tax costs. The Premier Inn owner stated that without these increases, the company could play a larger role in employing young people. The UK hospitality sector faces mounting costs after last year's budget ended pandemic-era business rates relief and introduced higher property valuations from April 2026.
While the government announced relief for pubs and clubs, hotels were excluded. US operator Hilton argued that cutting hospitality taxes would allow hotels to hire more young people and tackle youth unemployment. Paul noted the company's performance was driven by the strength of the Premier Inn brand, with revenue growing 2% to £1.57 billion in the first half.
Accommodation sales increased 3% in the UK and 18% in Germany. Activist investor Corvex Management, holding a 6.4% stake, recently called for a general meeting, arguing the company had underperformed. Whitbread asked shareholders to vote against the motion, with Paul stating it does not make sense for an activist investor to join the board.
The company remains on track to complete its five-year plan targeting £275 million in incremental adjusted pretax profit by fiscal 2031, alongside £2 billion in shareholder returns. Prime Minister Andy Burnham launched an independent review of commercial property tax valuations in August, which may lead to reforms for pubs and hotels in 2029.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing