Hotels, B&Bs and Holiday Lets: Costs and Benchmarks

The ONS splits accommodation into two groups. Hotels and similar accommodation includes hotels, guest houses and B&Bs that provide daily cleaning and services. Holiday and short-stay accommodation covers holiday lets, cottages, hostels and similar places. In 2024 there were 9,937 businesses in the first group and 7,396 in the second.

The figures

Source: ONS Annual Business Survey, 2024 results (published 26 May 2026). It covers businesses registered for VAT or PAYE, so the smallest sole traders are not included. Averages are pulled up by the largest firms. For sole traders and partnerships, the owners’ own pay is not in staff costs: it comes out of what is left.

Hotels spend more on staff, as you would expect from a business with a reception, housekeeping and often a restaurant. Holiday lets spend more on bought-in services such as cleaning contractors, laundry and booking platforms.

How it has changed since 2019

Hotels and guest houses: turnover rose 33% between 2019 and 2024, against a 24% rise in consumer prices, so it grew in real terms. The number of businesses rose 0%. Staff costs went from 30.0% to 31.9% of turnover, and what was left after staff and bought-in costs went from 29.3% to 29.8%.

Holiday lets and short stays: turnover rose 58% between 2019 and 2024, against a 24% rise in consumer prices, so it grew in real terms. The number of businesses rose 48%. Staff costs went from 24.8% to 28.1% of turnover, and what was left after staff and bought-in costs went from 35.2% to 24.0%.

The number of holiday and short-stay businesses grew sharply over this period, while the share of their turnover left after costs fell.

What this means for an accommodation business

• Fixed costs make occupancy critical. Rooms, rates, insurance and core staff cost much the same whether a room is full or empty. Know how many room nights a month cover your fixed costs.
• Price by demand. A price rise in busy periods often loses few bookings, and the arithmetic usually favours it.
• Count booking platform commission. Commission on online travel agent bookings is a bought-in cost on every booking it touches. Compare it with the cost of winning direct bookings.
• Energy is a large running cost. Heating, hot water and laundry run whether or not guests are in. Controls and timers are often the quickest saving.

Compare your business

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Guides that fit this trade

• Break-even point: the occupancy you need to cover fixed costs.
• Price increase calculator: how many bookings you could lose and still be better off.
• Energy cost payback: judging heating and laundry upgrades.