RSM: Hospitality under further pressure as wages rise to record high

Average weekly earnings in the accommodation and food services sector reached a record £357.05 in August 2025, according to the latest Office for National Statistics (ONS) labour market figures.

The figure was up from £346.52 in July and represented a 6.4% increase year on year. The number of payrolled employees in the sector rose from 2,085,155 in August to 2,111,295 in September, while vacancies fell slightly from 78,000 to 74,000 over the same period.

Within sectors, wholesaling, retailing, hotels and restaurants recorded regular pay growth of 5.9% — second only to the public sector’s 6.0%, the latter flattered by pay awards landing earlier this year. Private-sector regular pay growth was 4.4%.

Commenting on the figures, Saxon Moseley, partner and head of leisure and hospitality at RSM UK, said: “The steep rise in hospitality wages to a record high will come as a big concern to the sector, particularly following a prolonged period of subdued sales. This puts more pressure on margins, with every £1 increase in wages also leading to additional employers’ NIC, resulting in a double whammy on operators’ costs.

“Payrolled employees in the hospitality industry rose for the first time since April 2025 and this is only the second increase since March 2024. With vacancies coming down again after a surprise rise the previous month, this suggests operators have hit the bottom in terms of cutting staff numbers and are cautiously hiring again. Businesses are also likely to apply the brakes on recruitment as they wait to see what announcements come out of the Autumn Budget.”

He added: “After bearing the brunt of this year’s tax rises, the sector is calling out to the government for bold, meaningful support measures in the Budget. Operators will also be hoping the Budget gives consumers a spring in their step, so they feel confident enough to part with their money, particularly in the lead-up to the important Christmas season.”