Northern Ireland’s Hotels Federation has delivered a hard-hitting response to REVAL 2026, the revaluation of non-domestic properties in the region. The publication of REVAL 2026, says the Federation, confirms a sharp and unsustainable increase in rates liabilities for the hotel and wider accommodation sector, delivered with inadequate notice and without proper recognition of the economic realities facing the industry.
In a detailed response, NIHF Chief Executive Janice Gault says:-
“Analysis of valuation movements since 2015 demonstrates the scale of divergence from underlying economic conditions. Between 2015 and 2026, inflation has increased by approximately 35.5%. Over the same period, Net Annual Values (NAVs) have increased by approximately 90.6% — more than 55 percentage points above inflation and growing around 1.4 times faster than the wider economy.
“NIHF Member hotel NAVs were valued at around £13.8m in 2015. Had NAVs tracked inflation alone, the 2015 base of £13.8 million would equate to approximately £18.7 million in 2026 (excluding any new openings). Instead, NAVs stand at £26.3 million — some £7.6 million above inflation-adjusted levels. This is not inflationary drift; it represents a significant real-terms escalation in valuation.
“The delayed release of valuations until January has severely limited businesses’ ability to plan, budget or challenge revised NAVs. This contrasts starkly with England and Wales, where valuations were issued in November, allowing operators greater certainty and preparation time.
“The sudden removal of the Covid-19 rates discount has compounded this impact. The withdrawal of support in a single step has automatically increased NAVs by approximately 30%, with no transitional arrangements to reflect continued recovery, elevated debt levels or sustained cost inflation.
“Overall, the sector faces an average NAV increase of approximately 87%, broadly consistent with the long-term uplift observed since 2015 and far exceeding cumulative inflation. While final poundages are yet to be confirmed, early indications suggest rate increases will be similar, equating to a projected contribution from hotels of approximately £400,000 per week in the 2026–27 financial year. This level of increase is disproportionate and risks undermining investment, employment and competitiveness.
“Northern Ireland hotels already operate at a structural disadvantage due to VAT differentials, with a 20% VAT rate compared to 13% on accommodation and 9% on food and non-alcoholic beverages in the Republic of Ireland. Increased rates will further weaken Northern Ireland’s tourism competitiveness at a time when cross-border comparison is unavoidable.
“It is also important to note that minimum wages increased sharply — roughly 90% from 2015 to 2026 — compared to general inflation. Energy costs rose even faster during certain years, compounding cost pressures beyond what headline inflation suggests. These and many other factors have drastically reduced profitability since the current rates model was developed.
“The current valuation methodology places excessive emphasis on turnover while failing to adequately reflect rising wage, energy, food and service costs. The hotel valuation scheme further penalises investment, as improvements in quality and star classification automatically trigger higher NAVs, discouraging reinvestment in standards and visitor experience.
“The sector has invested approximately £500 million since the pandemic, generated £633 million from overseas visitors in 2024 and supports over 70,000 jobs. Treating hotels as a convenient source of revenue risks long-term damage to one of Northern Ireland’s most economically productive industries.
“Urgent government intervention is required to moderate the scale and pace of these increases and deliver a fairer, more sustainable approach to rates — one that reflects economic reality rather than amplifying pressure at a time of continued structural challenge.
“The Northern Ireland Hotels Federation calls on government and local councils to implement the following measures to mitigate the damaging impact of REVAL 2026:
- Introduce a phased removal of the Covid-19 rates discount rather than a single-step removal.
- Establish a targeted transitional relief scheme for hotels facing exceptional NAV increases.
- Undertake an urgent review of the hotel valuation methodology to better reflect profitability and operating costs.
- Amend the hotel valuation scheme so reinvestment and quality improvements do not automatically trigger disproportionate NAV increases.
- Confirm district and regional rate poundages earlier to allow effective financial planning.
- Work with HM Treasury to address VAT disparities that disadvantage Northern Ireland relative to the Republic of Ireland.
- Improve transparency and efficiency within the appeals process.
- Commission an independent assessment of the cumulative impact of rates, VAT and cost inflation on tourism and employment.
“These actions are essential to protect investment, safeguard jobs and ensure the long-term competitiveness of Northern Ireland’s hotel sector.”