Hospitality Sector Bears Brunt of UK Job Cuts, Industry Leaders Warn

London, UK – Industry leaders have highlighted the hospitality sector as the primary casualty of recent economic challenges, citing over 89,000 job losses since last October. According to analysis by UKHospitality, the organization representing more than 123,000 venues, the sector now accounts for 53% of all job declines in the UK, with 4.1% of its workforce already lost. The group warns that this figure could surge to 100,000 by the next budget if conditions persist.

“The impact on hospitality is staggering,” said Kate Nicholls, chair of UKHospitality, in an interview with BBC Radio 4’s Today programme. She revealed that a third of businesses have reduced operating hours, one in eight are closing locations, and 60% are cutting staff numbers. The combination of higher taxes, increased National Insurance contributions, and a recent minimum wage hike has forced difficult decisions, with part-time and flexible roles disproportionately affected.

Mark Wrigley, owner of Manchester’s Atlas bar, shared his struggles with the BBC, explaining he had to stop paying himself to manage costs. “We probably generate £300,000 or £400,000 for the government from this one business, and yet I get nothing from it,” he said, emphasizing the sector’s financial burden.

The Treasury has responded by extending business rates relief and reducing licensing costs to encourage al fresco dining. However, UKHospitality argues that these measures are insufficient. Recent data from the Office for National Statistics (ONS) shows inflation reached 3.8% in July, driven by soaring airfares and food prices, exacerbating challenges for the sector.

Liz McKeown, director of economic statistics at the ONS, noted that job openings have dropped by 5.8% to 718,000 between May and July, with declines concentrated in hospitality and retail. “There is evidence that some firms are not recruiting new workers or replacing those who have left,” she added, underscoring a tightening labor market.

UKHospitality is calling for urgent tax relief, particularly on business rates and VAT, to prevent further closures and job losses. The group warns that without intervention, the sector could face a crisis comparable to the pandemic-era downturn. Meanwhile, the government maintains its support for pubs, cafes, and restaurants through licensing reforms and tax caps.

Related Topics: Hospitality Industry, UK Economy, Travel & Leisure Industry

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