Whitbread, the owner of Premier Inn, said the Government's decision to freeze business rates for hospitality firms in England will have a significant positive impact on its finances.
The company was responding to the 2026 Budget, which will hold rates for two years so that no hospitality property faces an above-inflation rise.
Business rates are the property tax paid by commercial occupiers, and they are one of the largest costs for hotel and restaurant operators.
Whitbread said it was still waiting for the full details of the measures.
Its preliminary estimate is that rates payments will rise by only £7.5 million to £12.5 million in the 2028 financial year (FY28).
City analysts had previously pencilled in an increase of about £35 million.
Whitbread expects a similar benefit in FY29.
By then, it estimates that its rates bill will be £45 million to £60 million lower than previously expected.
Wage costs
Dominic Paul, chief executive, said the measures would do much to offset the damage of the past two Budgets to the hospitality sector.
He also welcomed what he called a more reasonable increase in the national living wage and national minimum wage.
Together with limiting rates rises to inflation, he said, this would make a significant difference to the business.
Paul said the changes added momentum to Whitbread's Five-Year Plan, which he said was on track to deliver a material increase in margins, cashflow and shareholder returns.
Whitbread will give its FY28 UK cost inflation guidance, including the estimated effect of the Budget, at its third-quarter trading update in January 2027.
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