Last orders: Rachel Reeves' budget threatens Britain's third-largest employer

Soaring operational costs and endless policy turbulence have left the visitor economy bracing for an Autumn Budget that could either revive the UK's global competitiveness or pile on yet more barriers.

I ask myself the question, how can the government claim to support economic growth whilst the visitor economy faces rising costs and an international market moving far faster than Westminster?

The numbers tell a sobering story.

Hospitality alone employs 3.5 million people directly, the UK's third largest employer, contributing £93 billion to the economy.

Factor in supply chain multipliers and that's 6.5 million jobs and £214 billion: 18% of total UK employment, 9% of GDP.

The Autumn Budget of 2024 delivered a hammer blow: employer National Insurance rose from 13.8% to 15%, the threshold dropped from £9,100 to £5,000 and the National Living Wage increased 6.7% to £12.21.

The average hospitality wage bill jumped 8.5%, forcing price rises, investment cuts or closures to businesses.

Indeed, one-in-three vacancies stem from firms unable to find people with the right skills. In hospitality, 8.6% of workers lack required skills—almost double the wider economy.

Apprenticeship starts have fallen by over a third in the past decade, whilst Hospitality, travel and tourism remain absent from the Industrial Strategy's priority sectors.

Since July 2025, chefs, bar managers and bakers have been removed from the Skilled Worker visa list, whilst salary thresholds rose to £41,700 for new applicants.

This immigration clampdown arrived precisely when the domestic pipeline couldn't meet demand.

And the Sector is being treated as an Afterthought. Tax decisions fail to reflect hospitality, travel and tourism's £20 billion export role.

Whilst overall visitor numbers recovered to pre-pandemic levels in 2024, business travel—the highest-value segment—remains severely depressed, hampering the sector's profitability.

There are Border delays, no VAT relief, and unchanged aviation taxes. Competitors slashing levies undermines the UK's appeal.

Business rates relief has been cut to 40% and London is considering a 5% tourist tax on accommodation—another cost layer which will price visitors out.

The UK cannot maintain its global appeal if the fiscal environment keeps squeezing operators and travellers already priced out.

Sustainable growth requires backing one of the country's most productive, job-generating sectors at the exact moment it needs stability to thrive.

If this Budget fails to confront that reality, we risk undermining not just an industry, but the communities, workers and economic resilience that depend on it.

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Zoe Adjey is a Senior Lecturer in Hospitality and Tourism at the University of East London

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