Figures released on Thursday 17 July by the Office for National Statistics (ONS) showed the industry has lost 84,000 jobs since the budget last October.
It meant the sector now accounts for almost half (45%) of all job losses, equating to around 13,000 job losses a month, according to the ONS. There were an estimated 79,000 vacancies in the sector between April and June this year.
The data also indicated hospitality has been one of the hardest hit sectors of the economy since the budget, along with the construction and education industries, with increasing labour costs and VAT cited as some of the main pressure points for firms.
Devastating losses
Commenting on the figures, UKHospitality (UKH) chair Kate Nicholls said: “These devastating job losses are a direct consequence of policy decisions at last year’s Budget, which have disproportionately hit the hospitality sector.
“The change to employer NICs in particular, was socially regressive and had a disproportionate impact on entry level jobs. Without a change of tack from the Government we could be looking at even more job losses in hospitality, when we should be bringing people into the jobs market.
“We desperately need to see action at the upcoming Budget. We urge the Government to act on our asks to fix NICs, by extending the existing exemptions to include both young people and people moving from welfare to work, which will boost jobs and help to reverse this huge loss.”
The estimated number of vacancies in the UK fell by 56,000 (7.2%) on the quarter, to 727,000 in April to June 2025. Total estimated vacancies were down by 143,000 (16.5%) between April and June 2025 compared to a year ago, and 68,000 (8.6%) below their pre-coronavirus level.
In addition, the number of unemployed people per vacancy stood at 2.3 from March to May this year, up from 2 in the previous quarter (December 2024 to February 2025).
This was the 36th consecutive period where vacancy numbers dropped compared with the previous three months, with vacancies decreasing in 14 of the 18 industry sectors.
Revive high streets
Nicholls added: “We also need to see lower business rates to revive high streets, and a VAT cut on hospitality to drive investment.
“We have seen time and time again that our sector is extremely capable of meeting the Government’s growth and employment objectives, if given the optimal operational environment. This is why we need our asks met, before we are taxed out.”
Additionally, average weekly earnings in the accommodation and food services industry increased from £341.96 in April 2025 to £345.34 in May 2025, and were up 4.3% from £331.26 in May 2024, tax and audit consulting firm RSM UK stated.
Average weekly earnings in accommodation and food services increased slightly from £341.96 in April 2025 to £345.34 in May 2025, and were up 4.3% from £331.26 in May 2024.
RSM UK partner and head of leisure & hospitality Saxon Moseley said: “While the reduction in hospitality staff appears to be part of a longer-term trend, this has been accelerated due to the recent rises in employment costs.
“We would expect to see vacancies in the sector come down from immediate post-Covid highs, but the continued decline below 2019 levels suggests Government policy is weighing heavily on the sector.
“Some operators have reached their limit in passing on costs to customers and so have turned to reducing headcount to mitigate their expenses and preserve margins, which risks denting the customer experience.”
Moseley added it was hoped the Government would “revisit” the National Insurance increase announced last year to offer “some form of relief”.
Moseley continued: “The hope is that the Government revisits the National Insurance increase in the Autumn Budget to offer the sector some form of relief.
“Uncertainty around immigration policy means there are growing concerns in the industry surrounding skilled visas and access to chefs. The sector relies heavily on overseas workers, so an inability to get hold of the right staff will only exacerbate workforce issues further.”
