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The boss of a multibillion-pound hotel group has blamed Labour for his decision to slow investment in Britain and focus overseas instead.
Greg Hegarty, the co-chief executive of PPHE Hotel Group, which runs the Park Plaza and art’otel brands, said he was prioritising countries such as Spain and Italy over the UK because of the Government’s economic policies.
He said: “I’m sorry to say that the UK is not the primary focus of growth for our company any more. I would deploy capital in other European cities at the moment, where it is more favourable to the hospitality sector and easier for a business to grow.”
London-listed PPHE runs a £2.2bn property portfolio of hotels across the UK and Europe. It has ploughed huge sums of money into the UK in recent years, including the opening of a £300m art’otel site in Hoxton, east London, last year.
Mr Hegarty said the company would still consider opportunities in the UK but would not seek them out. He said: “We’re used to taking risks. However, the risk factor in the UK at the moment for us is a hard one to deal with currently.
“We are looking for further properties in Rome. We’re looking at other Italian cities such as Florence, Milan. We’ve always been interested in Spain – in Madrid and Barcelona, for example – and growing our Croatian portfolio further. We’ve got a lot of land sites in Croatia, which we can develop and get higher levels of return than we can in the UK.”
His comments come as hospitality chiefs brace for an increase in employer National Insurance contributions from April. The tax raid will cost companies across Britain £25bn.
Business owners have complained that the National Insurance increase, combined with an accompanying 6.7pc rise in the minimum wage from April, will disproportionately hurt the hospitality sector and discourage investment at a time when companies are already grappling with sky-high costs.
Mr Hegarty said: “It’s not just National Insurance, it’s the thresholds of business rates, the ongoing flip-flopping of policy ... It just creates a total lack of consumer confidence. And this does impact demand, because you’ve got lots of people who are concerned about disposable income.
“I just don’t feel that the Government has actually got a grasp of how to deal with the service sector in general.”
He added: “We can adapt to these levels of wage increases. However, ultimately, it means that we need to re-evaluate the business. I am constantly looking at how we can minimise the cost to consumers and protect as many team members as I possibly can, but inevitably we will be recruiting less.”