Claridge’s has suffered a loss of just under £10m as the iconic London business warned government tax hikes were taking their toll.
The five-star Mayfair hotel, which opened its doors in 1898 before expanding via a five storey ‘mega basement’ in 2021, recorded a loss after tax of £9.7m for 2025, reversing a £2m profit the previous year.
Claridge’s said the loss was “predominantly driven by the inflationary change in payroll and related costs”, adding that it was “exposed to the risk of future government changes in industrial, fiscal, monetary or regulatory policies, including the adverse impact of the increase in employer National Insurance contributions and consecutive increases in minimum living wages.”
The hotel, a popular haunt for celebrities and visiting guests of the royal family, posted revenue of £137.8m for the year, broadly in-line with the previous year, while the cost of wages and employer taxes rose by more than £1m.
Hotels under pressure
Claridge’s has reportedly seen an even tougher year so far in 2026, after a steep drop-off in visitors from the Middle East triggered by the outbreak of war in Iran put strain on luxury hotels’ efforts to fill their priciest rooms.
According to tourism agency Visit Britain, bookings from the Middle East to the UK fell to as low as half their normal rate in March, and have continued to lag “well behind” trend rates in subsequent months.
“In the short term, the biggest financial risks facing the company are rising inflation rates, interest rates, energy costs, supply chain constraints linked to the ongoing war in Ukraine, Iran and Palestine,” Claridge’s said.
Hotels have also voiced fury at the prospects of yet more tax hikes in the form of new tourist levy powers set to be handed to regional authorities.
“Hotels are dealing with substantially higher business rates and employment costs, while doing everything possible to remain competitive and minimise the impact on guests,” Greg Hegarty, co-chief executive of PPHE Hotel Group, said.
“Adding another tax on overnight stays risks making the UK a more expensive destination for both domestic and international visitors and could ultimately weaken demand and impact employment.”
Claridge’s ownership transfer
Claridge’s had been owned by Hamad bin Khalifa Al Thani, the former Emir of Qatar, via a stake in luxury property group Maybourne, which had been embroiled in years of legal battles between shareholders.
But following Al Thani’s death in July, the hotel’s ownership “will devolve to his heirs or into a vehicle for their benefit in accordance with the applicable inheritance and legal procedures,” the company said.
In October, Claridge’s hired former Corinthia London manager Thomas Kochs to become its new managing director. The 128-year-old hotel was ranked number 16 on a list of the world’s 50 best hotels, the highest rank in the UK.