London’s Hospitality Sector
A labour market analysis
Exploring the Mayor of London’s priority sectors.
March 2025
Introduction
The Hospitality sector is important to both London’s economy and its diverse cultural identity, playing a central role in supporting jobs, attracting visitors, and enhancing the city’s global reputation. As a key employer across a range of skill levels, it also helps workers develop strong interpersonal and customer service skills that are invaluable for career growth and progression across the wider economy.
The purpose of this report is to provide a comprehensive analysis of the sector’s key labour market trends and characteristics, considering a wide range of indicators. By examining the sector’s performance through an array of lenses and comparing it to other industries and regions, this analysis aims to offer valuable insights for strategic planning and support evidence-based policy making across London.
This report is divided into 7 sections, each analysing a different facet of the sector and its workforce.
- People in Work: Explores how many jobs are in the sector and how employment has evolved over time.
- Worker Characteristics: Examines the professional and demographic traits of workers in the sector.
- Job Quality: Provides insights into earnings and the overall quality of jobs within the sector.
- Businesses: Investigates the profile and economic contribution of the sector’s businesses.
- Demand: Analyses how employer recruitment activity for sector-specific roles is changing.
- Skills Needs: Identifies the specific skills that employers within the sector are seeking.
- Education and Training: Reviews the provision of education and training relevant to the sector.
An FAQ guide has also been published alongside this report to help users navigate its contents.
Definitions: All definitions used in this report related to the sector - including industries, occupations and subject areas - are set out in the definitions and additional resources section, at the end of this report.
Data: Links to the raw underlying data are included under each respective chart(s), where the data used is publicly available. The data included in this report refers to the latest annual data available at the time of publication but may vary by data source and is subject to revision.
Section 1: People in Work
How many jobs are in the sector, and how might it change over time?
What’s in this section?
➤ Overview ➤ Headline trends of people working in the sector ➤ Sub-sector composition of employment ➤ Numbers working in key occupations ➤ Industry projections (2025-2035)
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Section 1: Overview
This section explores job trends in the hospitality sector and its sub-industries, highlights key occupations, and examines regional job growth forecasts for the sector.
Steady employment growth: The number of jobs in London’s hospitality sector has generally grown strongly over the past decade, despite being adversely impacted by the COVID-19 pandemic. In 2023, the sector accounted for 458,700 jobs — a recovery to its 2019 pre-pandemic level – and equivalent to 7.2% of all jobs in the capital.
Key sub-industries and occupations: The largest sub-industry — food and beverage service activities — accounts for 82% of the sector’s employment. Key occupations reflect this, with chefs, kitchen assistants, and waiting staff among the largest in terms of job numbers.
Strong future growth projections: The National Foundation for Educational Research anticipates strong growth for the sector, with a 1.6% annual increase in employment from 2025 to 2035. This growth rate is substantially higher than that of other industries in London, positioning hospitality as a key driver of job creation in the coming decade.
Headline job trends in the sector
Job number recovery: In 2023, London’s hospitality sector accounted for approximately 458,700 jobs — returning broadly in line with its 2019 pre-pandemic level. Relative to 2010 however, the sector has grown by over 41%.
Adverse impact of the pandemic: As a sector, hospitality was disproportionately affected by the COVID-19 pandemic and its associated public health restrictions compared to other sectors, given its inherently people facing nature. While many businesses tried to adapt their operations during this time – and many employees were protected under the UK Government’s furlough scheme – job numbers in the sector dropped more than 10% for much of 2020 and 2021. Upon widescale economic reopening and lifting of remaining restrictions in the latter half of 2021 and 2022 however, the number of jobs in the sector rebounded strongly highlighting the extent of pent-up societal demand for hospitality related services.
Recent cost-of-living challenges: Since the latter half of 2022, the UK economy has been subject to higher price inflation, which in turn has led to a cost-of-living crisis for many. These higher prices and reduced consumer discretionary income may have curbed demand for hospitality related services over the course of 2023, potentially resulting in the slight drop in the sector’s overall job numbers.
Hospitality job trends in London aligned with national: The share of total UK hospitality jobs located in the capital has remained broadly stable since 2010, standing at 17% as of 2023 – in proportion with that of all other industries in London. In addition, hospitality’s share of total jobs in London has been growing gradually over the past decade standing at 7% as of 2023, again broadly similar to hospitality job shares elsewhere in the UK. Combined, these figures suggest that London’s hospitality sector is generally aligned with national trends.
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The Annual Population Survey (APS) is a continuous household survey covering the UK, with the aim of providing estimates between censuses of main social and labour market variables at a local area level. The APS is not a stand-alone survey but uses data combined from two waves of the main Labour Force Survey (LFS) with data collected on a local sample boost. It provides a measure of the number of people in work which differs from the concept of jobs, since a person can have more than one job and some jobs may be shared by more than one person. As such, it is the preferred measure of employment and the associated characteristics of workers, including demographics, educational attainment, and occupation.
- Bespoke APS dataset: As part of this research into the Mayor of London’s priority sectors, the Office for National Statistics (ONS) has published bespoke APS tables for the GLA according to specific sector (SIC) definitions and using the region of work to assign the location of each job rather than the respondents’ region of residence. The number of jobs reported in this analysis using the APS is also the sum of main jobs and second jobs, so the figures may not represent the number of people by industry.
- Increased LFS uncertainty: Since the COVID-19 pandemic, there have been ongoing challenges with LFS response rates which have caused increased uncertainty and volatility in the production of its more granular labour market statistics. As such, LFS-based labour market statistics are currently considered ‘official statistics in development’ until further review. Because of the increased volatility of LFS figures, estimates should be treated with additional caution and are subject to revision. APS statistics are, however, still considered ‘accredited official statistics’, although uncertainty within the LFS may have some volatility implications for the APS, particularly for detailed breakdowns at regional levels.
- Workforce Jobs (WFJ) is a quarterly measure of jobs in the UK and is the preferred measure of short-term employment change by industry (SIC 1-digit only), since it provides a more reliable industry breakdown than the LFS. The number of jobs measured are the sum of employee jobs, self-employment jobs, government-supported trainees, and His Majesty’s Forces. The estimates are compiled from several sources, including Short Term Employer Surveys (STES), the Quarterly Public Sector Employment Survey (QPSES), and the Labour Force Survey (LFS). Note: Given that WFJ can also display a high degree of volatility quarter-to-quarter, the figures in this report are presented as the annual averages.
- The Business Register and Employment Survey (BRES) is an annual survey of around 87,000 businesses across the UK. It provides employee and employment estimates at detailed geographic and industrial levels and is considered the primary source for employee estimates at a detailed workplace, regional, and industrial level. In terms of coverage, its employment estimates are the sum of employees and working owners but do not include those self-employed or agency workers who do not pay VAT or PAYE, and so may underestimate the true number of people working in some sectors.
Rationale for differing estimates in hospitality: Compared to other sectors, hospitality data shows a stark difference in terms of people in employment estimates (APS) and business job number estimates (WFJ, BRES), albeit each displaying similar trends. One possible explanation is likely the high shares of individuals who work part-time for different businesses in sector, but may themselves work multiple jobs in hospitality to achieve the equivalent of full-time employment in terms of hours worked. As such, these individuals would show up as employees for multiple businesses but as only on person working in the sector. Another possible reason why numbers are lower from the APS data source is that it relies on individuals to respond rather than businesses. Being among the most diverse, youthful and transient sectors in London, it is possible that its unique demographic characteristics have an impact on survey response rates that lead to underestimation of workforce size.
Further discussion on these comparisons can be found here: ONS - Comparison of labour market data sources.Sub-sector composition
- Food and beverage services dominant: In 2023, food and beverage service activities accounted 82% of employment in the sector, equivalent to 365,000 jobs in London. Within this sub-sector, the activities of licenced and unlicenced restaurants and cafes accounted for the largest number of jobs (202,000), followed by public houses and bars (49,000). Food and beverage service activities have consistently been by far the largest sub-industry within London’s hospitality sector, followed by accommodation accounting for 18% of overall sector employment.
People working in key occupations
Understanding the hospitality sector requires both industry and occupational perspectives. While the industry view focuses on business activities (above), the occupational lens (below) sheds light on the key roles and skills driving these activities.
Food and beverage occupations dominate: In terms of job numbers, the largest occupations within London’s hospitality sector are predominantly those employed in food preparation and related customer facing roles, consistent with the sector’s industry make up. Skilled trade roles, including chefs, are among the largest occupations, as are typically lower skilled kitchen assistants, waiting staff, bar staff and receptionists. Of all those people employed in sector-related occupations in London, approximately 16.1% alone (42,300) work as chefs.
Professional roles: Among the other large occupations are a number of professional and managerial roles, albeit fewer than in other sectors. For example, restaurant and catering establishment managers and proprietors, as well as events managers and a range of supervisors, also play an important role in the sector.
While industry-based analysis (Standard Industrial Classification - SIC) is essential to understanding a sector’s labour market performance, granular occupation data (Standard Occupational Classification - SOC) can offer further complimentary insights, particularly in relation to a sector’s skill needs and make-up.
To support the identification of specific sector-relevant SOC 4-digit occupations for each of the Mayor’s priority sectors, GLA Economics used Lightcast’s ‘staffing pattern matrix’ - which combines BRES and LFS microdata to produce an occupational make-up of an industry. GLA Economics then selected those occupations that were either found to be highly concentrated in, or specific to, that sector. For example, the vast majority of carpenters are identified as working in construction industries.
In doing this, more general occupations - such as sales, business administration and many customer service roles - which are typically employed in large numbers across London’s industries were excluded from the analysis. It should be noted however, that any given occupation may be employed in a range of sectors, and as such, an occupation included in one sector (e.g. creative) may also be relevant to another (e.g. construction). Therefore there are likely to be some occupational overlaps between priority sector areas in terms of key occupations.
The occupations identified as part of this exercise are the same as those used to employer demand and skills needs from job postings in Section 5 and Section 6 of this report.
The full list of sector-relevant SOC occupations is also available in the definitions and additional resources section, at the end of this report.
Projected change in industry job numbers (2025 - 2035)
Strong growth projected: According to the latest projections from the National Foundation for Educational Research (NFER) and their Skills Imperative 2035 research, hospitality employment in London is expected to experience strong growth. Job numbers in the hospitality sector are expected to grow by an average of 1.6% annually between 2025 and 2035, adding around 78,000 jobs over this period. This suggests that approximately 1 in every 4 new jobs created during this time will be in hospitality.
Faster than average: This anticipated growth exceeds the 0.4% average annual growth forecast for all other industries in London, highlighting the hospitality sector’s crucial role in driving new employment opportunities across the capital.
However, as with all projection models, there is a considerable degree of inherent uncertainty and therefore models which use alternative assumptions - such as by GLA Economics (2022) - may indicate considerably different trends.
The labour market projections produced by Institute for Employment Research (IER) and Cambridge Econometrics (CE) for The Skills Imperative 2035 are inherently uncertain due to the complexities of forecasting long-term trends. Developed in 2021/22, they try to account for existing technological and environmental trends. However, they can not capture unforeseen future events and were created during a period of considerable economic uncertainty following Brexit and the COVID-19 pandemic. As forecasting involves judgment and assumptions, uncertainties increase over longer timeframes, particularly at local levels. Therefore, these projections should not be used for precise workforce planning but rather as broad benchmarks to inform policy and strategic discussions.
For more information see General Guidelines for The Skills Imperative 2035: Occupational Outlook – Long-run employment prospects for the UK.
Section 2: Worker Characteristics
What are the professional and demographic characteristics of those working in the sector?
What’s in this section?
➤ Overview ➤ Demographics (incl. detailed breakdowns) ➤ Types of occupations in the sector ➤ Highest level of educational attainment ➤ Employment status (employee vs. self-employment) ➤ Employee type (full-time vs. part-time) ➤ Geographic distribution (sub-regional partnerships)
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Section 2: Overview
Demographic characteristics: The hospitality workforce remains youthful, almost equally split between men and women, ethnically diverse, and employs marginally fewer people with a disability than the rest of London’s economy.
Reliance on foreign-born workers: London’s hospitality sector is heavily reliant on foreign-born workers, with two-thirds born overseas – 27% from the EU and 39% from the rest of the world.
Elementary roles dominate: Elementary service workers make up 36% of the hospitality industry jobs in London in 2023, compared to just 5% in all other industries.
Lower education and qualification levels: Hospitality sector workers in London are considerably less likely to hold a degree (25%) compared to other industries (65%), in part due to the high prevalence of elementary roles which typically do not require advanced qualifications.
Relatively high shares in part-time positions: 47% of workers in the hospitality sector are employed in part-time positions compared to 24% in all other industries in London.
Jobs concentrated in central London: Almost 60% of hospitality jobs are located in the Central London Forward SRP, the primary district of leisure, tourism and cultural activities in the city.
Demographic characteristics
Detailed demographic breakdowns
- A youthful workforce: Despite an aging workforce overall, the hospitality sector in London remains young. The proportion of young employees (16-29) has typically fluctuated between 35%-40% over recent years, before a sharp drop to 28% as of 2023 (although there is some uncertainty / volatility in the data). Despite this however, young workers have consistently outnumbered those workers in the older age group (50+), although employment shares among this cohort have been rising too over the past decade.
- Entry level positions and a transient workforce: The high shares of young workers reflect the sector’s reputation as being a common labour market entry point. For example, many young people get their first jobs in the hospitality sector as they are typically more flexible and have lower entry barriers in terms of minimum educational requirements. As such however, the workforce is also likely to be more transient, with high rates of staff turnover relative to other industries.
- Benchmark comparison: In comparison to other industries in London, hospitality employs proportionately more young people (28% vs. 20%). However, when compared to the hospitality sector in other regions of the UK, London has a considerably older age profile, perhaps reflecting the capital’s higher concentration of skilled occupations (e.g. chefs) or opportunities for career progression in the capital.
Broad occupational composition of industry
Elementary service occupations dominate: Elementary occupations accounted for 36% of hospitality jobs in London in 2023, compared to 5% across all other industries in the capital. This is consistent with high numbers of kitchen assistants, waiting staff and bar staff employed across the city.
London vs. UK comparison: While the occupational mix in the capital’s hospitality sector is broadly similar to the rest of the UK, London has considerably more skilled trade occupations – such as chefs – and proportionately fewer elementary staff, compared to other regions.
Highest level of educational attainment
Varying educational attainment levels: London’s hospitality workforce has a mixed composition in terms of highest level of educational attainment. In 2023, 25% of workers held a degree or equivalent – similar to levels a decade previous – while a further 25% had either GCSE’s or no qualification as their highest level of achievement. These trends reflect the sector’s high demand for elementary service occupations which typically do not require advanced qualifications to take up employment.
Above the London average: Hospitality workers in London are much less likely to hold degree-level qualifications than those in other industries. In 2023, 25% of hospitality sector job holders had a degree as their highest qualification, compared to 65% across all industries in London. This gap again illustrates the sector’s heavy reliance on elementary service roles and trades.
London vs. other UK regions: Compared to the rest of the UK, London’s hospitality workforce is generally more highly educated, with almost 18% of workers holding a degree or equivalent across other UK regions. This difference may highlight London’s strength in the professional and managerial aspects of the sector, but also its generally more highly educated population.
Highest level of education groupings:
Degree or equivalent: Includes higher education degrees such a Bachelor’s Degree, Master’s Degree, DPhil/PhD and Degree level Apprenticeships (RQF level 6+ qualifications).
Higher Education: Includes higher vocational qualifications such as Higher National Diplomas / Certificates (HND/HNC) and Foundational Degrees (RQF level 5 qualifications).
GCE, A-levels or equivalent: Includes A-levels or equivalent, AS-levels, International Baccalaureate, and Advanced/Higher level Apprenticeships (RQF level 3-4 qualifications).
GCSE grades A*-C or equivalent: Includes O-Level/GCSE Grades A*-C and equivalents, and Intermediate Apprenticeships (RQF level 2 qualifications).
Other qualifications: GCSE < Grade C and equivalents, Entry-level Qualifications, Key / Core / Essential/ Functional Skills and Other qualifications (RQF level 1 and below qualifications).
No qualification: No qualification recorded.
Further information on the specific qualifications included in each education grouping can be found here (pg.336-339) using the mapping here (pg.26).
Employment status
Low prevalence of self-employment: In London’s hospitality sector, just 6% of workers are self-employed as of 2023, considerably lower than the 18% average across all other industries in the capital.
London vs. other UK regions: Self-employment is slightly less prevalent in London’s hospitality sector compared to the rest of the UK, where 9% of workers are self-employed.
Employee type
Prevalence of full-time employment: 54% of workers in London’s hospitality sector are in full-time positions, with this share slowly declining over time.
Comparison with other industries: The share of full-time employees in the hospitality sector is considerably less than that of other industries in London (76%). This is consistent with the high number of service occupations which may not provide adequate hours as well as the sector’s youthful workforce who often balance part-time employment with other activities, such as education. The sector also has some unique seasonality fluctuations - with typically higher demand for services in the summer months - that can aligns best with part-time contracts. Zero-hour contracts are also typically more prevalent in the hospitality sector.
London vs. other UK regions: When compared to the hospitality sector in other UK regions, London has higher share of full-time employment with just 39% being full-time outside the capital.
Geographic distribution
Central London dominance: Approximately 60% of those working in hospitality jobs in London work within the Central London Forward sub-regional partnership (SRP). This area has consistently accounted for over half of the sector’s workforce, although its share dipped sharply over the course of the COVID-19 pandemic.
Business location concentration: The high concentration of hospitality workforce in Central London aligns with the fact that many hospitality businesses are registered or headquartered in this area, as well as it being the central hub for the city’s tourism, culture and leisure activities.
Sub-regional employment concentration: From a sub-regional employment perspective, the hospitality sector also represented the largest share of total employments in the Central London Forward SRP, accounting for 4.2% of all those working in the area. The South London Partnership SRP had the lowest share at 3.1%.
While interpreting these findings, it is important to remember that many of the jobs located within London may be held by people who reside outside of the capital, or outside of the SRP in which their workplace is located.
The City of London and each of London’s 32 boroughs are members of one of four sub-regional partnerships (SRPs) in the capital. These SRPs serve a vital administrative function within local government by convening key stakeholders to collaboratively address London’s strategic economic and social issues, including skills, employment, infrastructure, and land use.
London’s Four SRPs:Section 3: Job Quality
What are the earnings and quality of jobs in the sector?
What’s in this section?
➤ Overview ➤ Hourly industry earnings ➤ Annual advertised salaries for key occupations ➤ Additional job quality indicators
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Section 3: Overview
Typically low-paid but steady earnings growth: Median nominal hourly earnings in London’s hospitality sector have steadily increased since 2010, reaching £13.25 as of 2024, with further growth expected in line with planned changes to minimum wage rates. While higher than the national average for the sector more broadly, this is considerably lower than the £21.87 median earnings across all industries in London. Nominal earnings growth however, has risen faster than price inflation in recent years resulting in real terms pay increases.
Low salaries for elementary service roles: Derived from job postings, elementary service occupations – such as kitchen assistants and waiting staff – tend to be offered relatively low salaries by employers that are close to London’s Living Wage. Conversely, managerial staff and skilled trades command the highest advertised salaries in the sector.
Mixed job quality indicators: London’s hospitality sector performs poorly on some key job quality measures, including low levels of pay, and unsatisfactory hours compared to other industries in the capital. It does however, have better scores on unpaid overtime and progression opportunities, particularly when compares to the hospitality sector elsewhere in the UK.
Earnings and advertised salaries
Industry earnings
Considerably lower than wider London averages: In 2024, median nominal hourly earnings in London’s hospitality sector reached £13.25. This is considerably lower than overall median earnings across all industries in the capital (£21.87), and slightly higher than the UK hospitality median (£12.00).
Strong earnings growth: While median hourly earnings in London’s hospitality industry are typically low compared to other industries, they have grown steadily since 2010, outpacing the growth rates of many other sectors.
Accelerating above inflation: When adjusted for inflation, median real earnings in London’s hospitality sector as of 2024 have grown by 35% compared to 2015. This percentage increase far exceeds the 5.6% real wage growth observed across all industries in London over the period, albeit a relatively small increase in nominal terms. Similar trends are reflected for the hospitality industries in the UK overall, where earnings growth has also resulted in real-term pay gains.
Furth growth anticipated: Future earnings data is anticipated to show further pay growth following announcements of above inflation increases in the statutory minimum/living wages, which many in the hospitality sector typically receive.
Earnings variation by occupation: While overall earnings in the hospitality sector are relatively low, there is likely significant variation by specific occupation, with some roles earning considerably more than others (see section below).
The Annual Survey of Hours and Earnings (ASHE), is the most comprehensive source of information on the structure and distribution of earnings in the UK. ASHE provides information about the levels, distribution and make-up of gross earnings and paid hours worked for employees in all industries and occupations. The ASHE is based on employer responses for a 1% sample of employee jobs, using HM Revenue and Customs Pay As You Earn (PAYE) records to identify individuals’ current employers. The ASHE does not cover the self-employed nor does it cover employees not paid during the reference period.
Owing to the way the ASHE data is structured, it has not been possible to construct estimates of median earnings for the sector in all other UK regions, nor has it been possible to construct a comparison to all other industries in London. As such the benchmark comparisons presented are for the sector in the UK as a whole, and for all London industries as a whole.
ASHE data for the latest year in the series is considered provisional and will be revised in a future ONS release.
Median advertised salaries (occupations)
Extracting median advertised salaries from job postings offers valuable insights into market rates for sector occupations in London, providing data not available from other sources, though it comes with important caveats (see notes).
Service role salaries advertised around LLW: Many of the most recruited occupations in the hospitality sector, including kitchen assistants, bar and waiting staff, and other elementary service occupations, have annualised advertised salaries around the London Living Wage (LLW), reflecting the low median wages for the industry as a whole.
Higher salaries for managerial occupations: Professional managerial occupations in hospitality – such as catering, bar and restaurant managers – typically command amongst the highest advertised salaries, as do skilled trades such as chefs.
Median advertised salaries are a useful metric to understand market rates, but have several important caveats:
Approximately 40% of job postings in London contain salary information, although there is significant variation between different occupational groups and, therefore, figures may not be fully representative of an occupation’s true median earnings. As such, median advertised salary data should be interpreted cautiously.
Where advertised salary is presented in a job description as an hourly wage, it is converted, by Lightcast, to an annual gross full-time equivalent salary figure.
Similarly, while advertised salary figures are presented as full-time equivalent, it is important to note that actual hours worked may differ.
Job quality indicators
To support the analysis and measurement of job quality and good work in London, the ONS have produced regional sector specific indicator estimates, building upon their broader 2021 publication.
Low pay: The most significant issue for the hospitality sector is the widespread opinion among workers (64%) that pay is too low. This issue is particularly acute in London, where costs of living are also typically higher.
Unsatisfactory work hours and lower job security: The sector also performs less favourably in some other areas, with hospitality workers expressing higher levels of dissatisfaction with working hours (underemployment), and the prevalence of zero-hour contracts compared to other industries in London.
Relatively positive feedback related progression opportunities: Compared to the sector elsewhere in the UK however, London’s hospitality workers consider there to be more opportunities for career progression, albeit still representing a significant challenge.
Section 4: Businesses
What are the characteristics and contribution of businesses in the sector?
What’s in this section?
➤ Overview ➤ Trends in the number of registered enterprises ➤ Industry output (Gross Value Added)
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Section 4: Overview
Important role in London’s economy: In 2024, London’s hospitality industries included 27,900 enterprises, making up 5.3% of all businesses.
Steady business growth and resilience: The number of hospitality enterprises has shown resilience, continuing to grow even through the pandemic, unlike other sectors where growth has plateaued. This highlights the hospitality sector’s enduring dynamism amid broader economic challenges, as well as the importance of the UK government’s temporary COVID supports.
Majority micro businesses but lower than elsewhere: Micro-enterprises (0-9 employees) account for the majority of the businesses in the hospitality sector (76%), although notably lower than the 91% in other industries.
Limited GVA contribution and output challenges: The hospitality sector contributed £13.3 billion to London’s economy in 2022, representing 2.8% of the capital’s total Gross Value Added (GVA). However, as of the most recent data, the sector has struggled to recover its pre-pandemic output levels, with London’s share of national hospitality output declining from over 24% to 22% post-pandemic, indicating a slower recovery compared to other regions and industries.
Registered enterprises in the sector
Headline trends in the number of sector businesses
Hospitality enterprises in London: In 2024, London’s hospitality sector consisted of 27,880 enterprises, representing 5.3% of all businesses in the capital.
Resilience and growth: The number of hospitality enterprises in London has grown steadily since 2010 (+63%) – even throughout the economic disruption caused by the pandemic – outpacing the growth in other sectors in the capital which has broadly plateaued since 2019.
Comparison to other UK regions: London’s share of hospitality enterprises is lower than the 6.6% seen across other UK regions. This is likely due to London’s concentration in sectors such as technology, finance, and professional services, which are more prevalent than in other regions of the UK, reflecting the city’s unique economic profile.
Enterprise composition
Sub-industry composition: Similar to overall job numbers, the largest sub-industry in terms of enterprise numbers within the sector as of 2024 was food and beverage service activities, at almost 91%. Accommodation accounted for the remaining 9%.
Fewer micro-enterprises: While micro-enterprises (0-9 employees) account for the largest share of London’s hospitality sector – accounting for 76% of all sector enterprises – this is a lower share than the 91% seen across other industries in the capital. This lower share likely reflects the sector’s labour intensive nature.
Sector Output: Gross Value Added (GVA)
An analysis of Gross Value Added (GVA) — a measure of the value generated by producing goods and services — provides insights into the contribution that the hospitality industry makes to London’s local economy.
Headline trends in sector GVA
Limited contribution: While the hospitality sector makes a notable contribution to London’s economy, accounting for £13.3 billion, this represents a relatively small share (2.8%) of the capital’s total GVA as of 2022.
Sluggish performance: The sector’s output was heavily impacted by the pandemic and the resulting public health restrictions, and, despite a strong rebound in 2022, it has not yet returned to pre-COVID levels, unlike many of London’s other industries. London’s recent GVA performance for hospitality has also lagged that of other UK regions.
Lower national contribution: Before the pandemic, London’s hospitality sector contributed 24% of the UK’s total hospitality output, broadly in line with other sectors. However, post-pandemic 2022, this share has fallen to around 22%, suggesting that London has recovered more slowly compared to other regions.
Sub-industry composition of output
Food and beverage service activities: In 2022, the food and beverage services sub-industry accounted for close to 73% of the hospitality sector’s total GVA, making it the largest contributor, consistent with the sector’s overall higher employment and firm numbers.
Accommodation services: While the smaller of the two sub-sectors at 27% in 2022, accomodation services accounted for a disproportionately large share of total GVA relative to its employment share, suggesting better productivity dividends.
Section 6: Skill Needs
What specific skills are employers seeking?
What’s in this section?
➤ Overview ➤ Top skills in demand for specific occupations ➤ Digital skill needs
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Section 6: Overview
Unique and shifting skillsets: Every occupation related to the hospitality sector has its own unique skill requirements, which are constantly evolving.
Strong demand for common skills: Employers of hospitality related occupations, given their typically entry-level and customer facing nature, place a particular emphasis on strong interpersonal or soft skills when recruiting.
Stable demand for digital skills: Demand for digital skills in hospitality occupations has remained broadly stable in recent years, with 16% of job postings currently making explicit reference to at least one digital skill. This is considerably lower than the 46% seen across all other occupations in London.
Variability in digital skill needs: The requirement for digital skills can vary widely across hospitality roles, with postings for professional roles the most likely to expressly require them.
Skills in demand for key occupations
Assessing sector-related skills requirements at the detailed occupational level is essential because skills needs vary significantly between roles. Each occupation within a sector requires distinct competencies, and understanding these differences enables more targeted training and workforce development that aligns with the specific and evolving demands of each job.
This section uses job posting data to identify the skills in demand for the most recruited hospitality-related occupations in London. The analysis highlights the most sought-after common/transferable skills, as well as the specialised/technical skills critical to each role, and examines how their prevalence in job postings has shifted since the pre-pandemic period.
In particular, interpersonal skills feature heavily across hospitality occupations, given their customer-centric nature. The sector also providers important opportunities to build these key skills which are applicable and widely sought across the labour market.
Common Skills are prevalent and transferable across many different occupations and industries, including both personal attributes and learned skills. (e.g. ’Communication or ‘Problem solving’). These include soft skills, human skills, and general competencies.
Specialized Skills are typically only required within a subset of occupations or equip one to perform a specific task (such as ‘Econometrics’ or ‘Lifeguarding’). These are sometimes known as technical skills or hard skills.
More information is available at Lightcast’s skills taxonomy.
A thorough understanding of the skills, qualifications, and competencies that define each occupation, and distinguish them from one another, is essential for policymakers, educators, and employers alike. It allows them to identify similar job roles based on their shared skillsets, and, in doing so, enables them to start to build occupational career pathways. These not only inform the sector’s overall workforce development strategy but also equip individuals with the knowledge they need to better understand and progress their careers.
In addition to the skills analysis in this report, tools such as the Institute for Apprenticeships and Technical Education (IfATE) occupational maps, the UK Careers Service’s career explorer and the U.S. O*NET occupational descriptions also provide valuable frameworks for understanding specific role requirements, and what is required to transition between them.
Digital skills
Tracking and analysing the prevalence of digital skill demand in the labour market is important given its cross-cutting nature and potential to drive innovation and productivity across all sectors. As technology continues to transform the nature of work, understanding the demand for these skills will ensure that the workforce can adapt to evolving job requirements as they arise.
Unchanged demand in hospitality: Demand for digital skills in occupations related to the hospitality sector have been broadly stable since 2019. Currently, 16% of job postings for hospitality-related occupations explicitly require at least one digital skill—though this is significantly lower than the 46% seen across all other occupations in London. Fluctuations in overall sector demand for digital skills can also depend on changes in the underlying occupational mix.
Uneven distribution across roles: The need for digital skills is not evenly spread across hospitality roles. Demand is highest among customer service supervisors (52%), followed by events managers and organisers (47%) and other professional or managerial roles. In contrast, skilled trades and elementary service jobs like bar/waiting staff and chefs are the least likely to require these skills, featuring in 6% or less in each of their respective job adverts.
Most in-demand digital skills: The most sought-after digital skills across hospitality roles include a wide range of Microsoft Office tools (Excel, Word, Outlook), data entry, and basic computer literacy.
Building upon Lightcast’s own definition of ‘software’ skills, GLA Economics has further developed and expanded this definition using Lightcast’s skills taxonomy. Through this process, GLA Economics have identified over 13,000 specific ‘digital’ skills, or skills that closely imply digital or software expertise.
This granular definition can help provide insights into the demand for digital skills within the sector in London. However, it is unlikely to offer a complete picture of digital skill needs. Some relevant digital skills may not yet have been identified, while in other roles digital expertise may be implicitly inferred rather than explicitly stated. As such, this analysis should be considered only indicative of demand within the sector and its related occupations. It is also important to note that changes in the underlying occupational makeup of the sector over time may also affect the observed demand for digital expertise.
GLA Economics’ definition of digital skills remains experimental and is constantly being refined to reflect its rapidly evolving nature. As such, prevalence estimates may fluctuate with each iteration of this release.
The rapid development of digital technologies — such as artificial intelligence (AI), machine learning, and advanced robotics — is expected to bring significant changes to the labour market. These advancements may automate routine tasks and reshape the nature of some occupations, with impacts anticipated to vary by sector and skill level. Roles requiring critical thinking, creativity, and specialised expertise are likely to adapt, while those focused on repetitive tasks may face greater challenges. Experimental analysis by the ONS on automation (2019) and DfE on AI (2023) highlights differing levels of exposure across occupations.
While the rapid speed of technological change means the overall impact of these new technologies remains uncertain, it emphasises the importance of fostering adaptable skills and supporting lifelong learning that helps individuals and organisations respond effectively to change.
Definitions and Resources
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