Hospitality sector to see 3.5% wage growth in 2025, new report reveals

The recently released 4th Global Salary Planning Report by UK-based pay and reward consultancy 3R Strategy uncovered global salary trends and data insights from organisations across over 40 countries in more than 20 industries. It provides a detailed analysis of the salary budgets in 2024 and forecasts for 2025, alongside data on pay transparency, communication, performance-related pay, the use of salary data, and gender pay gap reporting.

According to the report, over 2024 the median pay increase was 4%, whereas in the hospitality & leisure sector, it was 4.2%. This is in comparison to inflation at 1.7% in September 2024. Furthermore, the median pay budget increase across the UK is set at 3.5% for 2025, the same as the hospitality & leisure sector. This is in comparison to sectors such as retail and FMCG which demonstrated lower forecasted budgets.

Importantly, in the recent Autumn Budget, the government announced a National Living Wage increase of 6.7% from April 2025, which surpasses the planned pay budget increases for that year. Employers will need to account for this, as a 3.5% budget doesn’t mean that everyone can receive a 3.5% pay increase – entry-level positions that are paid at the National Living Wage will require a 6.7% rise. Additionally, the budget includes an increase in employer National Insurance Contributions (NIC) from 13.8% to 15%. While the impact on pay budgets remains uncertain, some organisations may choose to offset this by adjusting their overall pay budgets.

Commenting on the results, founder and managing director of 3R Strategy Rameez Kaleem said: “Conducting our Global Salary Planning Survey for the fourth year in a row, we were delighted with the level of participation. UK inflation has declined significantly over the past year and interest rates have begun to ease, which is an encouraging sign for employees. We hope our report will serve as a valuable resource for 2025 salary planning to help businesses retain talent.”