New ONS labour market figures show average weekly earnings in the accommodation and food services industry fell year on year for the first time in more than 30 months in August.
Average weekly earnings were down 1.4% from £354 in August 2025 to £349 in August this year. Vacancies also fell 7% year on year from 75,000 in the three months to September 2025 to 70,000 in the three months to September 2026.
“The first annual decline in hospitality wages in nearly three years suggests we may have reached an equilibrium, providing a degree of stability and some relief to operators,” said Saxon Moseley, partner and head of leisure and hospitality at RSM UK.
“Another fall in hospitality vacancies partly points to operators being leaner with their operations and creating efficiencies through AI, but, more worryingly, it also highlights businesses are being priced out of hiring.
“Stark increases in national minimum wage (NMW) and employers’ National Insurance have made it extremely expensive to take on new staff, particularly younger generations, many of whom tend to take their first step on the career ladder in consumer-facing businesses.”
He added: “The industry wants to see lower taxes for younger people and a freeze on NMW rises so that hiring of the younger generation can become more viable again. Employers will be waiting with bated breath as to what the new NMW rate will be from April 2027 in next week’s Budget.
“Nevertheless, with almost 1m people aged between 16 and 24 not in education, employment or training (NEETs), a change in government policy has the potential to give the whole economy a shot in the arm.”
