Although business rates will rise when the 2021 list is introduced, the increase won't be as high those implemented in 2017, according to a new report from real estate advisory firm, JLL.
However, it also forecast that budget operators and London operaters are likely to be hit with the largest rates rises, adding to the pressure already felt to cut costs.
The study showed that revenue grew in most areas between the valuation dates for the 2017 and 2021 rating lists. In the 2017 rating list, hotels account for 3.28% of the total with a rateable value of £2.089bn. Of this total 48% (£1bn) lies in London.
The likely to rise for the 2021 rating list will mean that operators will come under further pressure to reduce fixed costs and maintain operating profits.
The report also predicts a rise in rateable values in most locations for 2021, but not as large or as widespread as the rises seen between the 2010 and 2017 lists.
However, it also showed that a rise in local room numbers in some areas, such as Heathrow, is boosting revenue growth.
This aspect, coupled with the fall in the rating multiplier and increasing inflation, could see the 2021 rating revaluation be less impactful across the sector than in 2017.
(source: JLL)