Business finance experts at money.co.uk have analysed ONS (Office of National Statistics) data about average hours worked and median average pay for a range of sectors.
It found that while accommodation and foodservice activities make up a significant part of the UK’s economy, with the hospitality sector’s annual economic contribution hitting £93bn in 2023 and estimated to increase by another £29bn by 2027, this was not reflective in workers’ salaries.
Accommodation and foodservice industry workers were shown to have the lowest hourly pay rate, with an average working week at around 26 hours long. Average hourly pay came in at £12.39 – just 18p above the national living wage with median gross pay hitting just £16,800 a year.
Financial hardship
Money.co.uk said businesses within the industry have faced a lot of financial hardship in recent years, with the Covid pandemic and national insurance increases.
The result, it said, was that this has made improving workers’ pay increasingly difficult while still making a profit, contributing to lower hourly rates in the sector.
The sector also ranked in the top 10 for the amount of overtime worked, with employees clocking an average of 2.8 hours per week.
Joe Phelan, money.co.uk business bank account expert, said: “Figures from UKHospitality show the hospitality sector is experiencing significant worker shortages, with around 132,000 vacancies – 48% above pre-pandemic levels.”
Industry pay rates
He added: “Our research suggests that industry pay rates could be contributing to this, with a 10% drop in salaries over the last year, on top of accommodation and foodservice roles ranking bottom compared to other sectors for hourly pay.
“Combine this with the sector ranking in the top 10 for overtime, this could be why the hospitality sector is struggling to attract and retain employees.”
However, he said pay isn’t the only way to attract and retain staff.
“In fact, a recent study found more than a quarter (29%) of workers would be prepared to accept a lower-paid job for a better work-life balance,” he said.
“Prioritising healthy working conditions and minimising overtime for staff can go a long way in improving recruitment and retention efforts.
“Hospitality business owners can achieve this by proactively anticipating and adequately staffing for busy periods to ensure employees can take proper breaks and finish on time, even when it gets busy.”
