Hostel chain to replace receptionists with self check-ins after Reeves raid

Telegraph

05-04-2025

The boss of a major hostel chain is planning to swap his receptionists for automated check-in machines because of Rachel Reeves's tax raid on employers.
Larry Lipman, chairman of Safestay, said his company would have to rely on automated self check-in booths instead of human staff as costs soar following the October Budget.
He said the Chancellor's decision to increase National Insurance (NI) contributions and lower the threshold at which they are paid meant the company would look at 'doing away with receptionists' in favour of automated check-ins in some cases.
'Costs are costs, and they eat profit. We're a listed business and we want to deliver value to our shareholders, and that means controlling our expenditure. That means controlling payroll. I'm not happy with it, of course I'm not,' he said.
He added there would be a 'natural reduction' in staff rather than specific job cuts, with Safestay opting not to rehire for positions when people move on rather than make redundancies.
'We're not going to call our 400 staff in 12 countries and say we're losing 10pc of them,' Mr Lipman said.
'I'm very cognisant of the fact that we pay their mortgages. But people do leave, especially a lot of our staff who are transient. They are young, and they work for six to 12 months, and then they go to another country.'
Founded by Mr Lipman in 2006, Safestay runs 20 travellers' hostels across the UK and Europe. The company listed on London's Alternative Investments Market in 2019.
Trade association UK Hospitality has warned that the combined impact of tax rises in the Budget would cost the hospitality industry £3.4bn annually. Bosses have warned this will prompt them to slow or cancel investments and cut jobs.
Mr Lipman said: 'It just means we're looking harder at automation. This is where I think the Government may have it wrong, because if all of business is doing what we're doing, because we must, then you're going to hit employment levels.'
He said the industry was being 'forced in the direction' of reducing staff. 'I love to grow people and it's part of what we should be doing for society. It's a great thing for a business to be giving that sort of opportunity. It all seems counterproductive.'
Mr Lipman said it would be difficult for Safestay to use price rises to mitigate the cost increases without damaging its position in the market as a budget operator.
'There's little we can do with bed rate, because there's a ceiling to what people will pay, and people are feeling the pressure. I fear, without being political, that the Government didn't think this through.'
A government spokesman said: 'Since the start of this parliament there are 190,000 more jobs in the economy, and going forward we are delivering on our plan for change by providing economic stability to create growth, jobs and put more money into people's pockets.
'The OBR forecasts unemployment to stay low by historical standards throughout this parliament and to fall to 4.1pc in 2029.'