UK Hospitality Sector Faces Potential Loss of 100,000 Jobs Following Autumn Budget Measures

The UK hospitality sector could see up to 100,000 job losses in the coming months, according to warnings from UKHospitality’s chief executive Allen Simpson, who described the prospect as entirely plausible given the combined impact of recent fiscal measures.

The grim forecast follows significant changes announced in last month’s Autumn Budget, including increased minimum wage rates and business rates adjustments that industry leaders say will place additional strain on already struggling operators.

Simpson highlighted particular concerns for young workers entering the industry, noting that while those aged 16 to 24 represent just one-tenth of the UK’s overall workforce, they comprise approximately half of employees in certain hospitality positions.

The sector has already experienced substantial workforce reductions, with approximately 100,000 positions eliminated since October’s previous Budget, which imposed higher National Insurance contributions on employers.

From April, minimum wage rates will increase across all age brackets. Workers over 21 will see their hourly rate climb by 50 pence to £12.71, whilst those aged 18 to 20 face an 85 pence increase to £10.85. Under-18s and apprentices will receive a 45 pence uplift, bringing their rate to £8 per hour.

Speaking to the BBC, Simpson emphasised the growing financial burden of recruiting early-career staff. Recent Office for National Statistics data reveals 702,000 people aged 16 to 24 are currently unemployed, representing an increase of 60,000 compared with the previous year.

As the fallout from the chancellors budget continues Tim Rumney, CEO of BWH Hotels GB said:
“The detail that followed the Chancellor’s Budget last week has exposed just how detached Government policy has become from the reality facing Britain’s independent hotels. What was presented as support for business is, in truth, a disproportionate tax raid on a sector already fighting for its life.

“The withdrawal of the 40% business rates relief for hospitality – combined with a token 5p reduction in the multiplier – amounts to a direct and significant tax rise.

“For thousands of independent hoteliers across the country, this is nothing short of a stealth tax increase that will push many to breaking point.

“Independent hotels are the backbone of Britain’s regional tourism and local economies and they are being confronted with soaring operating costs, persistent staffing pressures and now punitive property revaluations that bear little resemblance to trading performance.

“Our members began crunching the numbers and the results are alarming:

• In the North West, one member faced a 17% rise, from £155,000 to £181,000.
• In the Midlands, another saw a 23% uplift, from £54,000 to £66,500.
• One Yorkshire hotel is facing a bill rise from £55,777 to £117,700, a 111% jump
• In the most shocking case, a hotelier in Wales reported an eye-watering 182% increase – from £63,500 to £179,000.

“The pressure is no less severe in Scotland. Although Scottish hoteliers did not benefit from the 40% relief, the new rateable values released on 1 December reveal similarly distressing increases.

“These figures are not just numbers on a spreadsheet. They are the difference between contributing to Britain’s visitor economy or becoming another boarded-up building in a declining town centre.

“The independent hotel sector cannot absorb increases of this scale without severe and lasting damage. The consequences will be felt not only by the businesses themselves, but across the communities, supply chains and regional economies that depend on them.

“We are calling on the Government to rethink its approach as a matter of urgency.”