Whitbread, the owner of Premier Inn, has scaled back planned hotel investments that would have created jobs due to UK tax increases, its chief executive has warned.
Dominic Paul said recent budgets have "hammered" hospitality through higher taxation and labour costs.
He urged Andy Burnham to freeze property taxes ahead of his first autumn Budget later this month.
"We need this Budget to be a turning point for the industry," Mr Paul told the Press Association. "What we have seen in recent budgets meant that we have had cut potential investments in hotels, which would have created more jobs."
Hotels are facing pressure following the end of pandemic-era business rates relief and updated property valuations affecting tax calculations from April 2026.
The government has announced rates relief for some parts of the hospitality sector, such as pubs and music venues, but did not extend this to hotels.
He added that potential tourist taxes will be “very unhelpful” for the group, which runs 842 hotels.
Last month, Mr Burnham said he would give regional mayors the power to introduce a visitors’ levy on overnight stays from 2028.
On Tuesday, Whitbread said it is nevertheless seeing “strong trading momentum” in the UK and Germany, despite pressure on consumer finances.
It reported that total revenues rose by 2 per cent to £1.57 billion for the six months to 27 August, compared with the same period last year.
Meanwhile, adjusted pre-tax profits slipped by 9 per cent to £287 million for the half-year, as it pushes ahead with a five-year transformation plan.
The company said it has completed plans to close its branded restaurants, hitting the Beefeater and Brewers Fayre brands. Earlier this year, the firm announced plans to cut about 3,800 jobs in the UK and Ireland as part of a new five-year strategy to achieve £250 million in cost savings.
It said it has already completed some hotel extensions and is pushing forward with planning applications to convert more former restaurant units into hotel rooms.
The company’s previous restructuring plan, launched in 2024, resulted in around 1,500 job cuts.
It is still planning to increase the number of hotel rooms it has open to 96,000 by the 2031 financial year, from the current number of approximately 86,600.
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