GovWire

Hotels

Valuation Office Agency

October 24
16:00 2023

1.1 This section provides guidance on the valuation of hotels for rating. There are separate Rating Manual sections covering the valuation of guest houses and bed and breakfast accommodation (Guest houses and bed and breakfast accommodation and serviced apartments).

1.2 There are many different types of hotel, from fairly standard budget hotels to highly individual luxury and boutique properties sometimes located within buildings of high historic significance. They include hotels specialising in particular markets such as dedicated health spas. Operators vary from large multi-national hotel companies operating under one or more major hotel brands, to small independent hoteliers running a single property.

1.3 This section describes the valuation approach for both the larger branded and independent hotels, normally valued on a receipts-based approach, and smaller hotels where there is more likely to be reliable rental evidence and a receipts-based approach may not be appropriate.

2. List description and special category code

2.1List description in all cases: hotel and premises.

2.2Special category code138 should be used for all AA 4 and 5 star hotels and equivalent, together with all branded / major chain operated and larger independent hotels. As a specialist class the appropriate suffix letter is S.

2.3 Special category code137 should be used for smaller independent hotels 3 star and under. Responsibility for these lies with the generalists, and the appropriate suffix letter is G.

2.4Country house hotels are a specialist class and should be givenspecial category code077 with an S suffix.

2.5Health spas (health farms) are a specialist class and should be givenspecial category code125 with an S suffix.

3. Responsible teams

3.1The 4 and 5 star, branded / major chain operated, and larger independent hotels are a Specialist Class subject to a national scheme. Responsibility for implementing the scheme as set out within the Practice Note lies with the National Valuation Unit (NVU).

3.2Smaller hotels graded at 3 star and under which are not branded or operated by major chains are a Generalist class to be dealt with by the Rating Valuation Units (RVU).

3.3Budget Hotels and Lodges - these will be split between NVU and RVU on the following basis: All lodges with public houses forming a singlehereditamentwill be dealt with by RVUs underspecial category code227, suffix G. All standalone lodges or budget hotels with either no bar or restaurant facilities or with integral bar/restaurant facilities will be dealt with by the NVU using special category code 138, Suffix S.

4. Coordination arrangements

4.1The hotel Class Co-ordination Team (CCT) has overall responsibility for the co-ordination of this class. The team are responsible for the approach to and accuracy and consistency of valuations. The team will deliver practice notes describing the valuation basis forrevaluationand provide advice as necessary during the life of the rating lists.

4.2Caseworkers have a responsibility to:

  • follow the advice given at all times
  • not depart from the guidance given on appeals or maintenance work, without approval from the co-ordination team
  • seek advice from the co-ordination team before starting any new work.

5.1Under the Town and Country Planning (Use Classes) 1987 Order (as amended) Class C1 applies - use as a hotel, boarding house or guest house, where no significant element of care is provided. Operators will need to adhere to the provisions of the Licensing Act 2003 as appropriate to the offer provided by their business model.

5.2The Regulatory Reform (Fire Safety) Order 2005, SI2005/1541 introduced a new regime for fire safety replacing a raft of earlier regulation. Fire authorities no longer issue fire certificates and those previously in force have no legal status. The order applies to virtually all premises including all guest accommodation properties and hotels. Under the Order a responsible person who has control of the premises must carry out a fire-risk assessment of the premises which should identify fire hazards, identify people at risk, evaluate, remove or reduce and protect from risk, record findings and prepare an emergency plan, and regularly review.

Self-catering / self-contained accommodation

5.3 The statutory background to the rateability of self-catering accommodation applies equally to aparthotels with self-contained apartments and self-contained lodges and suites as part of a wider hereditament. The background on this is itemised in detail in the Rating Manual: Section 5a: Valuation of all property classes: Holiday accommodation (self-catering) Part 5 Legal Framework.

6. Survey requirements

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