Hotel Tycoon Warns Inheritance Tax Could Destroy Family Empire
Sir Rocco Forte, the renowned hotel magnate behind the £1.4bn Rocco Forte Hotels group, has issued a stark warning that recent inheritance tax changes could force the sale or breakup of his family business. In an exclusive interview, the hospitality veteran expressed profound disillusionment with Britain's current business climate, which he compares unfavorably to the troubled 1970s era of blackouts and economic stagnation.
Britain's Fading International Reputation
The hotelier, who recently relocated to Italy, described watching a Six Nations rugby match where commentators referenced Prince William's attempts to rehabilitate the Royal Family after the Prince Andrew scandal. "External publicity of the UK is very poor," Forte observed. "I talk to Italians, Germans and our many American customers who come through the hotels, and their opinion of the UK is very down. It's very down as a country."
Forte believes Britain's international standing hasn't been this diminished since the 1970s, when the government implemented a three-day working week amid energy crises and double-digit inflation. This declining perception has prompted his company to gradually reduce its UK footprint over recent years.
Strategic Retreat from British Market
Between 2007 and 2016, Rocco Forte Hotels sold its only Welsh property to Principal Hotel Group and divested Manchester's first five-star hotel. Then in 2023, the family sold a 49% stake to Saudi Arabia's Public Investment Fund in a deal valuing the group at £1.4bn. While the London-headquartered company still operates iconic properties like Brown's in Mayfair and Edinburgh's Balmoral, its expansion plans now conspicuously exclude the UK market.
"Naples, Sardinia on the Costa Smeralda, and Noto," Forte listed as upcoming locations, noting Britain's limited appeal with only two "truly international cities" compared to Mediterranean destinations.
Policy Failures and Business Hostility
The hotel magnate, a longstanding Conservative donor, criticized what he views as decades of myopic policymaking with an anti-business bias, particularly affecting hospitality. He has vocally opposed the Tories' application of VAT on tourist shopping and their economic mismanagement after the financial crisis.
However, Forte reserves his strongest criticism for the current Labour government under Keir Starmer and Chancellor Rachel Reeves. "We're returning, effectively, to the closed shop era of the 70s," he declared. "It constantly talks about growth, and then everything it does destroys growth – it's almost shameful."
Employment Reforms and Tax Burdens
Forte expressed particular concern about Labour's employment reforms, describing the workers' rights overhaul as "terrifying" for empowering unions. He characterized the simultaneous reduction of employer national insurance thresholds and above-inflation minimum wage increases as an "attack on employment."
The government's business rates overhaul will cost his flagship properties millions annually, with Brown's Hotel facing £1.5m in additional yearly taxes by 2028. "All the extra costs have been tied to business all at the same time," Forte lamented. "And the sort of cumulative effect is enormous."
Existential Inheritance Tax Threat
The most critical danger comes from the government's decision to end decades-old inheritance tax exemptions for family businesses, effective next month. This change has provoked outrage from prominent entrepreneurs, including Sir James Dyson, who warned his engineering firm would become "unrecognisable" after his death due to massive tax liabilities.
Forte delivered a stark assessment of his own company's prospects: "If I drop dead tomorrow – and if you suddenly have inheritance tax charged even on 20 per cent of the whole value of the family businesses – there's no way my family can pay that tax without selling the business or breaking it up."
He emphasized this isn't just about his enterprise but "the overall effect on all the businesses which are very important" to the UK economy.
Political Alternatives and Future Focus
While both Reform UK and Kemi Badenoch's Conservatives have pledged to reverse the inheritance tax changes, Forte remains unconvinced by either alternative. He believes Badenoch hasn't sufficiently distanced herself from the "one-nation Tories" responsible for economic stagnation, while Nigel Farage's flirtation with policies like nationalizing British Steel strikes him as "deeply unimpressive."
Consequently, the octogenarian entrepreneur is channeling his energy into international expansion rather than retirement or succession planning. "I want to see my company grow significantly over the next five years, and I feel I've got the energy and enthusiasm to help drive that forward," Forte stated resolutely. "That's my outlook at the moment, and I also can't think of anything worse than sitting around with nothing to do and just enjoying myself."
