Whitbread (LSE:WTB) expects its FY28 Business rates bill to rise by only £7.5m to £12.5m, against a previous consensus increase of about £35m, after the Government froze rates for hospitality in England.

What was announced

Whitbread PLC on 29 October 2026 welcomed business rates measures set out in the UK Government's 2026 Budget, saying they are expected to have a "significant positive impact" on the group's financial performance.

According to the company, the Government has reduced the planned increase in business rates for hospitality businesses in England. Rates for the sector will be frozen for two years, meaning that no hospitality property will face an above-inflation increase over that period. Whitbread noted that it is still awaiting full details of the measures, and described its own numbers as preliminary estimates.

Whitbread is a FTSE 100 constituent and a major hospitality operator with a large property estate in England, which makes business rates a material cost line for the business.

The numbers

On the company's estimates, total business rates payments in its 2028 financial year (FY28) will rise by between £7.5m and £12.5m. Before the Budget, the consensus expectation had been for an increase of around £35m. A simple calculation from those figures suggests the FY28 increase will be roughly £22.5m to £27.5m smaller than previously expected.

Whitbread said it expects a similar benefit in FY29. Taken together, the company estimates that by FY29 its cumulative business rates payments will be between £45m and £60m lower than previously expected.

The announcement does not quantify the effect on profit beyond these business rates estimates, and it does not set out a revised profit outlook. Whitbread said it will provide guidance on FY28 UK cost inflation, including the estimated impact of the Budget, at its third-quarter FY27 trading update in January 2027.

What management said

Chief executive Dominic Paul said the measures would "do much to mitigate the damaging impact of the past two Budgets on the hospitality sector". He thanked the Government for listening to the concerns raised by the company.

Mr Paul linked the rates freeze to what he described as a more reasonable increase in the National Living Wage and National Minimum Wage. He said the combination of these changes is expected to make a significant difference to the business. Wage rates are a major cost for hotel and restaurant operators, alongside property costs.

The chief executive also said Whitbread remains on track with its Five-Year Plan. The company says the plan is aimed at delivering a "material increase in margins, cashflow and returns for shareholders". The announcement does not give further detail on the plan's targets or describe specific additional cost-mitigation actions.

Background

Whitbread's chief executive explicitly referred to the "damaging impact" of those earlier Budgets on the sector, and the latest statement is framed as partial relief from that pressure.

Because business rates are charged on the rateable value of properties, operators with large owned or leased estates, such as hotel groups, are among the most exposed to changes in the system. Whitbread's estimate that cumulative payments will be up to £60m lower by FY29 reflects the scale of its property footprint.

What to watch next

The key next step is the January 2027 Q3 FY27 trading update, when Whitbread has committed to publishing FY28 UK cost Inflation guidance that incorporates the Budget measures. Investors will also be watching for the full details of the Government's policy, which the company says it has yet to receive, and for any change to the preliminary estimates once those details are known. Progress against the Five-Year Plan's Margin and Cash Flow goals will remain a focus in future updates.