Hollywood Bowl warns of Budget hit as business rates and wage rises bite

Hollywood Bowl warned that its costs will rise after the Budget changes to business rates and the minimum wage, saying the leisure operator faces a higher tax and wage bill in the year ahead.

The company said its total business-rate bill is set to increase by about 10% from next April, even as the Budget proposed a lower multiplier in the rates formula that could have reduced bills for retailers, leisure venues and other properties. Hollywood Bowl noted that a property revaluation linked to the rates formula will offset the reduced multiplier, effectively wiping out the expected relief and leaving the firm with higher costs overall.

Chief executive Stephen Burns told the Daily Mail he was disappointed after being led to believe reforms would reduce rates for leisure venues. “There’s been a rebalancing but it hasn’t been rebalanced in the right way,” Burns said. “For us, the increase was unexpected and, in line with all the other hospitality businesses, we expressed disappointment.” He added that while Hollywood Bowl could absorb the hit, the impact would be harder on smaller operators and that the hospitality sector remains a key employer in the UK.

The firm’s finance chief, Laurence Keen, highlighted that wage-rate increases for younger workers announced in the Budget would have a significant impact on cost base. The chancellor said the national minimum wage for 18- to 20-year-olds would rise 8.5% to £10.85 per hour from next April, while the rate for 16- and 17-year-olds would go up 6% to £8.

Despite the looming tax rises, Hollywood Bowl said it has benefited from ongoing robust demand for bowling, with the business reporting a fourth straight year of record sales. Revenue rose 8.8% to £250.7 million for the year ending September 30. Burns described the Christmas party period as “really busy,” and the group noted that trading trends had remained positive into the holiday season.

Shares in the company were down about 0.5% on the update, reflecting investor focus on cost pressures as the Budget’s wage and rate changes take hold across the hospitality sector.

The notes come as leisure venues and brick-and-mortar retailers weigh the effects of the Budget’s approach to business rates and wage costs. The government has argued the reforms would deliver persistently lower tax rates for more than 750,000 properties, but industry watchers say many firms could still face higher bills due to the revaluation cycle and other changes. Analysts say the combined effect of rate reform and higher wage costs could shape the competitive landscape for casual-dining and entertainment venues in the coming year, particularly for smaller operators with thinner margins.

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