Hospitality owners are being forced to bump wages and introduce additional incentives for workers in a bid to retain staff as job vacancies in the sector soar.
Wages for waiters, chefs, bar staff and other hospitality roles increased by 11.5% in London over the past year, research from Caterer.com found.
Around 29% of companies have also begun offering pensions, competitive annual leave and bonuses to remain competitive in a bid to keep staff.
Job vacancies for the sector were at 132,000 for the first quarter of 2023, research from the Office for National Statistics identified.
This represents a 22% drop versus the same period in 2022 and a 9% quarter-on-quarter fall but is 48% higher than pre-pandemic.
Kate Nicholls, chief executive at UKHospitality said: “While a 22% drop over the past year is significant, it remains the case that vacancies remain stubbornly high.
“We continue to hear that worker shortages are forcing venues to reduce opening hours or trading days, demonstrating that vacancies are not reducing quickly enough to fulfil hospitality’s enormous potential.”
For most hospitality businesses, staff salaries accounted for around a third of operating costs in 2022.
This combined with soaring energy bills, subdued consumer demand and high operating costs has made it difficult for the hospitality industry to gain traction post-Covid.
However, investors are clearly aware that recovery is on the horizon.
Shares in groups like Mitchells & Butlers PLC (LSE:MAB) and Restaurant Group PLC (LSE:RTN) are up more than 45% year-to-date despite the former reporting a £22mln year-on-year drop in underlying profits for the first half of 2023.