Hospitality Sector Faces Heavy Job Losses as Costs Bite

The UK’s hospitality industry - covering restaurants, pubs, bars and hotels - has seen the sharpest rise in job losses since last autumn, according to new analysis.

Industry body UKHospitality says that around 89,000 jobs have been lost since October 2024. They have said that hospitality has accounted for more than half of all job losses in the UK. The group warns that the total could reach 100,000 by the next Budget.

Why Is Hospitality Being Hit So Hard?

Reports suggest that a mix of rising costs and slowing demand is squeezing businesses from both sides:

• Higher wage costs: April’s increase in the National Minimum Wage has raised payroll costs, particularly in a sector where part-time and flexible jobs are common.
• National Insurance: Employers are now paying higher NI contributions.
• Other overheads: Energy bills, food and drink prices and rent have all increased.
• Weaker demand: With the cost of living still high, many households are eating out less often to save money.

Kate Nicholls, Chair of UKHospitality, described the job loss figures as “staggering,” and said that they are seeing a third of businesses cutting their opening hours, one in eight saying they are closing sites and 60% saying they are cutting staff numbers.

Some operators, like Manchester bar owner Mark Wrigley, have even stopped paying themselves to keep their businesses afloat.

Wider Job Market Trends

The Office for National Statistics (ONS) notes that overall job vacancies are down, with employers across industries being more cautious about recruiting or replacing staff. The number of employees on payroll has fallen in 10 of the last 12 months, with hospitality and retail taking the biggest hits.

What Can Business Owners Do?

If you’re in hospitality or another consumer-facing sector, here are some practical steps to consider:

• Make sure you’re accessing any tax reliefs you’re eligible for – for instance, are you receiving the business rates relief you’re entitled to?
• Manage your cash flow closely – prepare good forecasts that allow you to see what your payroll, energy and supplier costs are likely to be over the coming months. That will allow you to make early decisions if pressures start to mount.
• Diversify your revenue – offering takeaway, delivery, events, or private hire could help offset dips in walk-in trade.
• Keep communication open with any lenders and landlords – early discussions may help ease short-term pressures.

While the headlines are challenging, there are opportunities too. Finding creative ways to adapt can make it possible not only to weather the storm but to come out stronger.

If you’d like to explore strategies to protect your profitability, get in touch. We’re here to help you.

See: https://www.bbc.co.uk/news/articles/c05ey2ypp92o

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