London, The UK hospitality sector has suffered more than half of all job losses since the government’s last budget announcement in October 2024, according to analysis by UKHospitality, the leading trade body representing restaurants, bars, pubs, and hotels. The group, citing data from the Office for National Statistics (ONS), reported that around 89,000 jobs have been cut in the sector, which accounts for 53% of total job losses nationally.
- Sharp Decline in Hospitality Employment Amid Economic Pressures
- Business Owners Struggle to Stay Afloat
- Government Measures and Industry Response
- Cost Increases Compound Employment Challenges
- Historical Context and Sector Vulnerability
- Broader Implications for the UK Economy and Communities
- Outlook and Calls for Action
Sharp Decline in Hospitality Employment Amid Economic Pressures
UKHospitality’s figures reveal that 4.1% of jobs in the hospitality sector home to more than 123,000 venues nationwide have vanished since last autumn. The group has warned that without urgent government intervention, the number of job losses could surpass 100,000 by the time of the next budget.
Kate Nicholls, chair of UKHospitality, described the situation as “staggering,” highlighting the severity of the crisis. “What we’re seeing at the moment is a third of businesses cutting their opening hours, one in eight closing sites, and 60% reducing staff numbers,” Nicholls told BBC Radio 4’s Today programme. “There is a real risk of significant business closures and a return to job losses on a scale comparable to the Covid pandemic.”
Nicholls stressed that rising operational costs including business rates, VAT, wages, and energy have forced employers to make “agonisingly tough decisions” mostly impacting part-time and flexible roles, which are often the first to be cut.
Business Owners Struggle to Stay Afloat
Mark Wrigley, owner of the Atlas bar in Manchester, spoke candidly about the personal financial sacrifices he has made to keep his business operational. “I’ve stopped paying myself entirely to save costs,” Wrigley told BBC Breakfast. “From this one business, we generate £300,000 to £400,000 in taxes for the government, yet I receive nothing in return.”
His testimony underscores the profound financial strain that small to medium-sized hospitality businesses face amidst a challenging economic landscape.
Government Measures and Industry Response
The Treasury responded by highlighting measures intended to alleviate pressures on pubs, cafes, and restaurants. A spokesperson said: “Pubs, cafes, and restaurants are vital to local communities. That’s why we’re cutting the cost of licensing, enabling more establishments to offer pavement drinks and al fresco dining, and extending business rates relief on top of reducing alcohol duty on draught pints and capping corporation tax.”
These interventions follow Chancellor Rachel Reeves’ Autumn Budget, which included increases in business taxes. However, UKHospitality argues that higher taxes have disproportionately slowed investment and hiring within the sector.
Cost Increases Compound Employment Challenges
The hospitality sector is grappling with multiple cost pressures. The National Minimum Wage rise, effective from April 2025, has increased labour expenses amid soaring ingredient prices and energy bills. Employers also face higher National Insurance contributions.
Simultaneously, the UK is experiencing elevated inflation, which reached 3.8% in the 12 months to July 2025, according to the ONS. This uptick is primarily attributed to rising airfares and food costs and remains well above the Bank of England’s 2% inflation target. The cost-of-living squeeze has curtailed discretionary consumer spending, leading many to reduce dining out directly impacting hospitality revenues.
ONS director of economic statistics Liz McKeown noted, “The number of employees on payroll has now fallen in 10 of the last 12 months, with these declines concentrated in hospitality and retail.” She added that job openings fell by 5.8% to 718,000 between May and July 2025, with evidence suggesting that firms are freezing recruitment and not replacing departing staff.
Historical Context and Sector Vulnerability
The hospitality industry’s vulnerability to economic fluctuations is well-documented. During the Covid-19 pandemic, companies faced unprecedented challenges from enforced closures and social distancing measures, resulting in mass redundancies and permanent shutdowns.
Recovery was initially buoyed by government support schemes like furlough and targeted tax reliefs. However, the sector’s exposure to variable consumer demand, high fixed costs, and reliance on seasonal and flexible labour continues to expose it to disproportionate economic risks during downturns.
According to UKHospitality, the broader economic environment including Brexit-related supply chain disruptions, rising interest rates, and post-pandemic behavioural shifts has further complicated recovery efforts.
Broader Implications for the UK Economy and Communities
The hospitality sector’s downturn has widespread implications beyond business closures. It is a significant employer of young people and part-time workers, offering entry-level and flexible job opportunities. Job losses affect not only workers’ livelihoods but also local economies, particularly in regions reliant on tourism and leisure industries.
Experts warn that a weakened hospitality sector could slow the overall economic recovery, limiting consumer spending and increasing unemployment, with attendant social costs.
Dr. Anna Shah, senior economist at the Institute of Economic Affairs, commented, “Hospitality often acts as a barometer for consumer confidence. Prolonged weakness here signals broader economic headwinds. Policy support tailored to reduce fixed business costs and encourage demand is critical to preserving employment and economic vitality.”
Outlook and Calls for Action
UKHospitality is urging the government to take further measures to stabilize the sector, including cutting VAT and revising business rates to ease cost burdens. The group stresses the need for a collaborative approach balancing fiscal responsibility with support for a vital industry.
Nicholls concluded, “If urgent action is not taken soon, we risk losing a significant section of the hospitality landscape, with lasting damage to jobs, businesses, and community life.”
As the UK heads towards the next budget, the hospitality sector’s trajectory will serve as a key indicator of post-pandemic economic resilience and the efficacy of government support measures.
Para un análisis más detallado y una cobertura continua de los mercados laborales de EE.UU., las políticas comerciales, el gobierno del Reino Unido, las finanzas y los mercados, permanezca atento a PGN Business Insider
