Scotland’s hotel sector have been hit by a £63 million hike in business rates, a rise of more than a quarter over the last three years.
Research from property agency Knight Frank found average increases of 27.3% in their business rates bills when new rateable values were introduced on 1 April.
That saw the total annual business rates take for local authorities rise to £295 million from £232m in 2023.
However, there are huge variations between different council areas. While hotels in the Scottish Borders have seen the highest average uplift, 45.7%, to their rateable values, operators in Argyll & Bute have seen a 0.2% decline.
Glasgow and Edinburgh, where a large share of Scotland’s hotel stock is located, have seen increases of 41.9% and 38.9%, respectively.
April’s revaluation was the second since the system moved to three-year cycles, a move made by the Scottish Government to reflect changes in the property market.
The vast majority of commercial properties are believed to have seen increases in their rateable values. An appeals deadline is looming at the end of this month.
Earlier this year, Knight Frank found that more than 500 companies across a variety of sectors in Aberdeen are owed around £1.5 million in overpaid business rates. Five companies are due more than £100,000, with another seven owed more than £50,000.
Hamish Graham-Campbell, senior surveyor at Knight Frank, said: “The changes to rateable values mean it’s a postcode lottery for many hotel operators across the country.
“But, on average, they are facing a substantial increase to their business rates bills at a time when many are already facing significant cost pressures.
“Part of the reason for the large increases is the last tone date – when trading is assessed – in 2022 was at the tail end of the pandemic, when many hotels were still dealing with the after-effects of lockdowns.
“But, as Aberdeen shows, there will be many cases where appeals can be made and overpaid money recouped.”
Steve Dunbar, rating adviser at Knight Frank, said: “Once the appeal deadline has passed, you are stuck with your rateable value until the next revaluation cycle in 2029 – it’s use it or lose it ahead of the end of July.
“If any hotel operators feel the assessment they have been given is incorrect, they need to act as soon as possible to make their case to the relevant rates assessor.”
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