West End hospitality businesses suffer 20% loss in sales due to staff shortages

A survey of employers in the hospitality and leisure sector of the West End of London has revealed an average loss of 20% in sales due to staff shortages.

West End hospitality businesses reported that an average of 19% of jobs were unfilled, with the principal reasons being cited as a lack of applicants (both from the UK and internationally), jobs not meeting pay expectations, and the cost of living in London.

The survey was conducted by Heart of London Business Alliance, central London’s flagship Business Improvement District.

UKHospitality carried out a nationwide survey of hospitality businesses earlier this year that revealed an average of 15% of positions were vacant, and on average, 16% of sales were being lost due to staff shortages.

In Heart of London’s poll, the most common answer in response to being asked what would meaningfully help fill staff shortages was the introduction of a visa not covered by the points-based system, specifically targeting hospitality jobs; expansion of the Youth Mobility Scheme to more countries; and amending the points-based immigration system to consider sectors with acute shortages.

Ros Morgan, chief executive, Heart of London Business Alliance, said: “We are seeing businesses unable to open their doors, not because of a lack of demand but because of a lack of staff. It’s like another lockdown for businesses, but this time without support from government.

“The hospitality sector is making huge efforts to attract domestic workers, including through higher wages, but there is a real fear that the numbers just will not be enough. That’s why action is urgently needed from government, through reforms to boost the number of overseas as well as domestic applicants.”

Kate Nicholls, chief executive, UKHospitality, said: “This survey confirms what our data and our members tell us, as well as what we see with our own eyes in West End venues and beyond – that an acute shortage of labour is stifling the recovery of our sector. This is tragic in itself, but alongside rising costs for energy and raw materials, the inequity of business rates on hospitality, and diminishing consumer confidence, it also constrains the incredible economic and employment potential that our sector has, which could be driving wider economic recovery.”