Ingleton Wood's new London home
The multi-disciplinary property and construction consultancy have relocated, creating a showcase office that provides a flexible and collaborative workspace for staff.
Anyone who doubted the growing menace of business rates for the city centre hotel sector need look no further than the latest data release from surveyors Colliers International.
Colliers has analysed the business rates rises of 93 London hotels that saw the highest rises in their rateable value (RV) following the 2017 Revaluation.
Colliers found that these hotels in Central London will receive a total rates bill of £12.2 million this year, compared to £4.8 million in 2016/7 – that is more than two and a half times higher. The table below shows some of the rises individual hotels have seen which have been (and are still) steep.
The biggest rise is the Four Seasons in EC3 which saw its rates bills rise from £176,000 in the year before the Revaluation to a bill of over £570,000 this year. That’s a lot of extra rooms to fill at a time when hotels are suffering from the impact of other rising costs including staffing and food costs and the ever-growing competition from Airbnb.
Marc Finney, Head of Hotels and Resorts Consulting at Colliers, says: “The indirect tax burden on hotels is now becoming a major issue. About twenty years ago a hotel could expect to pay between 0.5%-1.0% of revenues on property taxes (business rates). This is now closer to 5.0-6.0% of revenues. With profit conversion rates in hotels running at about 30-35% at EBITDA level this makes property taxes equivalent to in excess of 15% and is fast approaching the same levels as Corporation Tax.”
Inspiration for your next read
What's in and what's out in hospitality property
The aparthotel sector has come of age. Aviva Investors, the global asset management business of the Aviva insurance business, has acquired the freehold interest in a central London apart hotel scheme, adding to its portfolio of high-quality, long-income real estate assets.