Price rises and jobs losses warning as hotels struggle to afford National Living Wage

PUBLISHED: 13:16 29 December 2015 | UPDATED: 13:16 29 December 2015

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The £7.20 per hour wage for all staff over 25 will come into effect from April

An independent hotel chain is calling on the government to ease pressure on the hospitality industry in south London as new figures shows price rises and job losses are likely as a result of the National Living Wage.

A survey of Best Western members revealed that over 90 per cent of respondents will have to increase their prices to mitigate the increase to staff salaries, 43 per cent said they would have to reduce their workforce as a result of the changes and 80 per cent said they would rethink recruitment.

The Office for Budget Responsibility (OBR) estimated the plan to increase the minimum wage would cost only 60,000 jobs and create one million jobs.

Rob Payne, CEO of Best Western Great Britain said: “The bigger picture here is that this will impact every café, every bed and breakfast, every visitor attraction and every pub, with potentially damaging consequences for investment in the British hospitality industry.

“My fear is that the 60,000 jobs the OBR identified as being at risk will be disproportionately distributed among small and medium sized hospitality businesses, those least likely to be able to simply absorb the costs.

“As a business, we are working alongside industry bodies to lobby the government for change.

“I would urge the government to do all it can at this time to help ease the pressure of the living wage in the hospitality industry elsewhere by looking again at reducing Tourism VAT, make the issue of rate parity a priority bringing us in line with our European businesses and reducing the regulation burden.

“Without this support I am concerned that the hospitality industry could pay a higher price for the introduction of the new National Living Wage.”

The wage, which the government has set at £7.20 per hour for all staff over 25 years of age increasing to £9 by 2020, will come into effect across the whole of the UK from April 2016.

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