Claridge’s swings to £10m loss as luxury hotel warns on ‘adverse impact’ of tax hikes

Claridge’s, a renowned Mayfair hotel established in 1898, recorded a loss of £9.7 million for 2025, marking a significant reversal from the £2 million profit it earned the previous year. The hotel's loss was primarily attributed to the inflationary increase in payroll and related expenses, and its exposure to future government policy changes, including the impact of higher employer National Insurance contributions and minimum living wages.

Despite a modest revenue of £137.8 million, Claridge’s faced rising costs, with wages and employer taxes increasing by over £1 million. The hotel, a favored destination for celebrities and the royal family, has encountered further challenges in 2026 due to a sharp decline in Middle Eastern visitors, a result of the ongoing war in Iran. According to Visit Britain, bookings from the Middle East dwindled to just half their usual levels in March, remaining significantly below trend rates.

Claridge’s cited several short-term financial risks, including inflation, interest rates, energy costs, and supply chain constraints stemming from the wars in Ukraine, Iran, and Palestine. Moreover, the hotel expressed concern over potential additional tax hikes in the form of new tourist levy powers, which could exacerbate the economic burden on hotels and potentially deter both domestic and international visitors.

Claridge’s, originally owned by Hamad bin Khalifa Al Thani, the former Emir of Qatar, will now fall to his heirs or a trust for their benefit, as dictated by inheritance and legal procedures. In October, the hotel appointed Thomas Kochs, a former manager of Corinthia London, as its new managing director. The prestigious 128-year-old hotel secured the 16th position among the world's 50 best hotels, the highest ranking in the United Kingdom.