Trade body UKHospitality warned this showed the effect of cost increases that were implemented during that month such as employer national insurance contributions.
Chief executive Kate Nicholls said: “It’s clear economic warning signs are flashing and the impact of April’s cost increases are having exactly the impact that was predicted.
“GDP figures can be volatile but an immediate shrinking of the economy and more than 100,000 jobs lost in just a month shows the huge increases to employer national insurance contributions is putting the brakes on growth."
Resilient sector
She added: “Hospitality is a resilient sector and businesses are doing all they can to trade their way out of these challenges, but it has the potential to be the engine for growth if it is properly backed.
“The economy only grows when hospitality is strong. The Government needs to take these warning signs seriously and urgently review and reverse the changes to national insurance contributions, while bringing forward clear plans to empower hospitality and the high street.”
However, audit, tax and consulting firm RSM UK was positive about the spring sunshine driving hospitality growth.
Significant cost increases
Partner and head of leisure and hospitality Saxon Moseley said: “Better weather makes a huge difference to consumer spending, which can be seen in the monthly GDP growth across accommodation and food services of 0.3%.
“This offsets the sharp fall in January 2025 and puts the sector back roughly where it was at the end of last year with food and beverage services driving the recovery.
“Given the hit of significant cost increases in April, this growth is good to see and should help operators balance the books.
“While this was mainly driven by unseasonably sunny conditions in April, we all know how unpredictable the great British weather can be so any ‘recovery’ is not guaranteed.
“Calls from leisure and hospitality businesses for further Government intervention were not specifically met in yesterday’s Spending Review but greater investment in local and regional transport could boost footfall, which will help support growth in the longer term.”
