The Scottish Government announced a 15% rates discount for eligible retail, hospitality and leisure businesses, alongside an £184 million transitional relief package over the three-year revaluation cycle.Then, after sector pressure, it increased relief to 40% for licensed hospitality premises. But the message coming back from organisations is blunt: for many, bills are still going up.For hospitality CFOs, business rates are no longer just a fixed property cost sitting quietly below the line. They are now a live commercial pressure. One that lands at exactly the same time as wage inflation, labour shortages, energy volatility, and already-fragile consumer demand.What is happening in Scotland is a warning shot for the wider sector. Even where governments step in with relief, the underlying cost base can still move against you faster than support can compensate. A temporary discount does not solve a structural profitability problem.The sharpest CFO takeaway is this: do not treat rate increases as something to absorb. Treat them as something to interrogate.If rateable values are jumping hard enough for some organisations to report up to a 64% increase, then finance teams need to get much closer to site-by-site exposure, true profitability by location, and whether legacy assumptions about occupancy, format, pricing and local cost-to-serve still hold.In this environment, resilience is not about hoping relief improves. It is about acting before higher fixed costs harden into lower earnings.That means revisiting the property portfolio and reforecasting at site level. Stress-testing cash flow and challenging valuations where appropriate. Looking again at categories that have historically been waved through as simple overheads. When rates rise sharply, every unmanaged cost matters more, as small leaks can become major margin erosion.The key point is this: in hospitality, cost control is no longer defensive, it’s strategic.The organisations that come through this period strongest will not be the ones waiting for policy to be kinder. They will be the ones using finance as an early-warning system to spot pressure sooner, moving faster, and protecting margin before the market forces the issue.Scotland’s hospitality debate is really exposing a wider truth. Relief may soften the blow, but it does not restore control.Reach out to your ERA Group consultant to discuss how we can help you regain control.
Contact Neil McCallum
Neil McCallum
Tel: 07738 934301E-mail: nmccallum@eragroup.com
