Is Your Independent Hotel in UK Set to Counter the Latest Budget?

March 2017 brought with itself the UK budget which dealt a massive blow in the form of increased business rates. How badly is your hotel going to be affected is hard to tell since it depends on the area. Richard Wackett, rating partner at Montagu Evans, says the firm’s research indicates that the median increase nationally is going to be around 17%, with London hotels seeing an average 37% rise and restaurants 36%. Broadly speaking, at least 10% of your hotel profits is to be polished off thanks to this move.

In some cases, like the Eccleston Square hotel, the hotel is bound to see a 122% increase in business rates. James Byrne, whose family owns the Eccleston Square hotel says, “This is going to have catastrophic effects not just on individual businesses but also London as a whole.”
Although some property specialists say business rates may fall because the rentable values (on which rates are based) have gone down since the last revaluation in 2010, many are of the opinion this reduction won’t amount to much.

With business rates counted as the third-biggest expense for hotel operators, after staff and rent, the significant rise in rates is bound to be a major gripe amongst the hoteliers. Many hotels are now contemplating serious cost-cutting measures like reducing their staff count, cutting down part of their operations or even shutting their hotels to move to greener pastures like the US where tax regime is friendlier.

In a nutshell, the road ahead for hotels in the UK look stark,

-4.5 million people to be affected
-2.5 lac businesses waiting for a verdict on appeals made up to seven years ago
-Transitional relief is way less than generous. For businesses with a rateable value of more than £100,000, the rate increase is capped to a massive 42% in first year.

Ufi Ibrahim, the Chief Executive of the British Hospitality Association said, “The £300 million spread around England’s hospitality to soften the blow of massive increases in business rates is a tiny drop in the ocean.”

With the industry overcast with the rate burden, your hotel must look at implementing serious steps to not just keep your head above water but emerge profitable. A good place to start would be by focusing on strategies to save money and time.

How to save cost?

If you have invested in a hotel management system that requires heavy upfront payment, requires regular upgrades, and needs a dedicated IT personnel to monitor the system, then you need to stop. There are powerful cloud based softwares available in the market that will cater to your hotel’s every necessity, without burning a hole in your pocket.

The rate increase demands cutting expenses and reducing staff count. Adopting a modern cloud based hotel management system seems like a win-win for your hotel. Cloud based hotel management systems like Hotelogix even offer an extremely affordable and user friendly mobile App that allow owners to run the entire hotel on their smartphone.

How to save time?

If you are dependent on inefficient and disconnected systems, you need to replace them now. With such disconnected systems, you end up wasting valuable time in revisiting manual errors and consolidating information from different departments. Switch to automated systems that come with integrated and simple workflows. It enhances efficiency by streamlining tasks and improving quality plus reliability. Be assured of a seamless and efficient end-to-end stay experience for the customer.

For instance, when Penny Farthing (located in Lyndhurst village) moved to Hotelogix from the previous pen-paper system, the staff felt they had more time at hand and were more confident about providing excellent customer service with more time for face-to-face interaction.

When considering a switching over, make sure the system is simple to use and easy to pick up. Since, the budget has already been announced and a steep rate increase is inevitable, investing in a new system that takes months to set up and train your staff makes for poor business decision. Go for a cloud based hotel management system that is quick to implement and easy to use. Giving you instant returns, right from day 1!

Hanging on to your old hotel management softwares or hardwares may have seemed promising some years back. But it’s imperative that your hotel keeps pace with the time and have the capability to insulate itself from adverse influences, be it economic, political, or environmental. A modern and comprehensive cloud based solution has the strength to keep you ahead of the curve and keep your hotel profitable year on year. Don’t just plan for budget 2017, we say start planning for the next one right from today.