Budget 2026: What UK Hotels Need to Know

Last week, the UK Government announced the Budget for 2026, with an estimated £1.4 billion in increases coming to hospitality payroll from wage increases from 1st April 2026. 

Industry Response  

Kate Nicholls, Chair of UKHospitality, said that the increases to minimum wage rates are “yet another cost for hospitality businesses to balance, at a time when they are already being taxed out,” stressing that the sector “has reached its limit of absorbing seemingly endless additional costs.” 

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The Key Wage Changes for Hospitality for 2026 

The Government has confirmed an estimated £1.4bn in wage increases from 1st April 2026:  

• The minimum wage for over-21s will increase by 50p per hour from April, to £12.71 - that's a rise of 4.1% 

• Workers aged 18 to 20 will get a bigger increase of 8.5%, to £10.85 an hour 

• Under 18s/Apprentices will get a 6% increase to £8 an hour - see all the changes here 

How UK Hotels Can Prepare and Respond  

Hotels in the UK can take proactive steps to protect profitability in the face of rising workforce costs:  

• Gain real-time payroll visibility: using costed rosters and tracking wages as a percentage of revenue.  

• Optimise workforce planning: matching workforce levels to occupancy and demand.  

These actions allow hotels to stay agile in the face of rising payroll costs and that’s where technology plays a key role.  

How Alkimii Helps Hotels Control Payroll Costs  

Alkimii People equips UK hotels with both the tools and processes to manage workforce costs in real time, giving operators the insight they need to make smarter, faster decisions.

1. Payroll Prediction

• Compare forecasted payroll with actual wage spend daily to spot cost overruns early and prevent unnecessary overspend. 

• Set payroll percentage targets by department.  

• Monitor daily variances and control labour costs while maintaining service quality.  
   

2. Smarter Rostering

• Align workforce levels with forecasts.

• Reduce unnecessary labour spend during quieter periods by setting productivity standards.  

• Create fair, transparent schedules that support employee satisfaction.  

Building Resilience and Offsetting Costs in 2026  

For hotels, Budget 2026 confirms that workforce cost pressures will continue to rise and the increase in the minimum wage will continue to test margins in every department.  

However, with the right systems and processes in place, hotels can stay in control. Data-driven visibility into payroll performance and utilising costed rosters gives operators the power to adapt quickly, maintain service quality, and protect profitability.  

Request a demo and see how Alkimii People can help your hotel can offset rising payroll costs in 2026 and beyond. 

Disclaimer: This article is for general information only and does not constitute financial, legal, or business advice. Figures and policies may change. Please consult official sources or professional advisors before making decisions. For more information on the UK Budget for 2026, please visit: https://www.gov.uk/government/publications/budget-2025-document/budget-2025-html