Average weekly earnings fell 1.4% from £354 in August 2025 to £349 in August 2026. Meanwhile, vacancies in the sector declined by 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 ONS calculates average weekly earnings using its Monthly Wages and Salaries Survey, which collects payroll information from more than 8,800 employers covering around 12.8 million employees. The measure represents earnings before tax and other deductions.
It reflects changes in both pay and workforce composition, rather than pay rises or cuts alone.
“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,” says 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.”
He attributes the pressure to increases in the National Minimum Wage and employers’ National Insurance contributions, arguing that these had made recruitment particularly expensive for younger workers entering the labour market through consumer-facing businesses.
Moseley adds that the industry wanted lower taxes for younger people and a freeze on minimum wage increases to make hiring more viable. He also highlights that employers would be watching for the Government’s announcement on the National Minimum Wage rate from April 2027 in the forthcoming Budget.
Moseley says that, with almost one million people aged 16 to 24 not in education, employment or training, changes to government policy could help improve access to employment across the economy.
His comments come as the Government and UKHospitality work with businesses including McDonald’s, Nando’s and Wagamama on an initiative aimed at creating employment opportunities for 100,000 young people not in education, employment or training (NEETs).
Under the three-year scheme, participating businesses will provide paid employment, work experience and training for people aged 18 to 24.