The valuation of hotels is a complex area of rating practice. The valuation is characterised by an interaction between the level of service provision, accommodation receipts and the proportion of total trade generated by rooms. The level of service provision must first be considered to establish the ‘class’ of a hotel; accommodation receipts are then analysed against total turnover. From this analysis, a percentage is applied to the Fair Maintainable Trade (FMT) to reach the property’s rateable value.
Checking the VOA have adopted the correct percentage and level of FMT can be a very worthwhile exercise, as illustrated by our recent success for a well-known and established hotel operator in Newquay, Cornwall.
The VOA had adopted an excessive level of FMT based on erroneous information regarding restaurant covers, parking spaces and bedroom numbers.
A check was submitted to the VOA resulting in a reduction in the FMT and the percentage applied to the FMT.
The RV was subsequently reduced by £41,500 and backdated to the start of the 2017 Rating List. The reduction represented an overall saving of £58,000 for our client.
Our experienced team is ready to assist with unparalleled regional advice.
