Hospitality Business Rates in Wales to Increase Significantly by 2028

Published on December 7, 2025

A big hike in business rates is hitting Wales’ hospitality industry. Wales’ hospitality industry faces a projected increase of an astonishing 80% by 2028! This increase is expected to greatly affect the restaurant, pub, hotel, and cafe businesses across the whole country. The hike in business rates is expected to put these businesses a n increase in bankruptcies, a increase in closures, and a devastating loss of country *wide jobs!

What’s Driving the Rate Increases?

According to recent analysis by UKHospitality Cymru, business rates for the hospitality sector will increase by £19.6 million in 2026/27, a 23% rise from current levels. In 2027/28, the increase will jump to £43.3 million (51%), and by 2028/29, the additional cost to the sector is projected to be £67.7 million, an 80% rise compared to the current rates.

The sharp increase in business rates is largely due to a 26% increase in rateable values, the removal of business rates relief, and the exclusion of hospitality businesses from the Welsh Government’s current business rates reforms.

Impact on Welsh Businesses

These rising costs will put immense financial pressure on local hospitality businesses, many of which have already been struggling in the wake of the pandemic and other economic challenges. With such steep hikes in business rates, some establishments may find it financially unsustainable to operate, potentially leading to closures. Furthermore, the increase could lead to significant job losses in the sector, harming local economies and communities that depend on these businesses.

The increased costs are particularly concerning for small, independent pubs, cafes, and hotels, which are vital to the fabric of Welsh towns and villages. As businesses face greater financial burdens, the risk of reduced services, layoffs, and a decline in the overall quality of hospitality will only grow.

The Government’s Stance and the Exclusion of Hospitality from Reforms

The Welsh Government’s decision to exclude the hospitality sector from its business rates reform has drawn sharp criticism. In a bid to address the concerns of local businesses, the Welsh Government has been working on a reform plan aimed at reducing the impact of business rates on certain sectors. However, hospitality businesses were not included in these reforms, a decision that has raised concerns within the industry.

Industry representatives argue that this omission unfairly burdens hospitality businesses, which are already facing the challenges of post-pandemic recovery. Without meaningful business rates support, many establishments may be forced to close, especially in areas that rely heavily on tourism and local visitors.

Potential Consequences for Welsh Communities

The proposed increases in business rates will not only affect businesses but also have broader consequences for Welsh communities. Local high streets, which are often home to many independent restaurants, cafes, and hotels, could see a rise in vacant properties as businesses are priced out. This could undermine the vibrancy of Welsh towns and cities, making them less attractive to tourists and locals alike.

Additionally, the potential for mass closures in the hospitality sector could lead to job losses, particularly in rural and tourist-dependent areas where few alternative employment opportunities exist. The Welsh economy, which relies heavily on tourism, would also suffer as fewer visitors would be drawn to areas with fewer hospitality options.

A Call for Immediate Action

UKHospitality Cymru has urged the Welsh Government to reconsider its approach to business rates reform and extend the changes to include the hospitality sector. Industry leaders argue that without intervention, the rising costs will result in widespread damage to Welsh high streets, the loss of jobs, and a stunted recovery for the tourism industry.

In response, the Welsh Government has acknowledged the challenges faced by businesses but has yet to implement any significant changes to the business rates system. It remains unclear whether the government will heed the warnings from the hospitality sector and include them in upcoming reforms.

What Travelers Need to Know

As Wales grapples with rising business rates, travelers may see changes in the availability and quality of hospitality services. Increased operational costs could lead to higher prices for food, accommodation, and other services, as businesses may pass on some of the costs to customers. Additionally, some businesses may close or reduce their hours, which could impact visitors’ options when planning their trips.

For those planning to visit Wales in the coming years, it is advisable to check with individual establishments to confirm their availability and operating hours. While Wales continues to be a popular travel destination, these rate hikes may alter the hospitality landscape in the region, making it more important than ever to plan ahead and support local businesses during their recovery.

What Can Be Done to Help?

More government support is needed to ease the financial difficulties faced within the hospitality sector which is being felt by local communities, tourists, and business leaders alike. Visitors to Wales in support of local businesses should consider staying in local lodges, eating at local restaurants, and enjoying local attractions to patronize the impacted businesses in the hospitality industry. The issue also needs additional support from those seeking advocacy to better the hospitality industry to help mobilize action from those at the top.

To conclude, the rapid increase in business rates to the hospitality sector of Wales is a clear threat to the affected local businesses, the jobs of their communities, and the communities within Wales as a whole from being financially sustainable. The hospitality sector of Wales is in desperate need of reforms to avoid potential irreparable harm to the industry and with the decline in available options, travelers should know of the challenges and potential alterations to the industry’s hospitality offerings. The action sought by the government of Wales is to protect the thriving hospitality industry in Wales for the benefit of those businesses and their customers.