Around one-third of hospitality businesses in London say they will not increase pay - or even try to cut wages - this year, according to a report from accountants RSM Tenon.
Some 92 owners, chief executives and directors from hotels, restaurants, bars, pubs, clubs and spas took part in the survey, conducted in partnership with Longitude Research.
Jonathan Perrin, RSM Tenon's head of hospitality and leisure, said he suspected the decision to not increase pay during 2012 is due to an expected drop in consumer demand across the next 12 months, with limited extra business created by the Olympics.
Meanwhile, restaurateur and chairman emeritus of the British Restaurant Association, Michael Gottlieb, said that the results of the survey are understandable, given the huge rise in costs hospitality businesses are currently facing.
"With a increase in costs of around 7-8% - primarily due to rising food and energy prices - employers can not also afford to raise wages as well," he said. "It just does not make economic sense.
Gottlieb said that it is vital that operators are totally transparent with their staff as to why they are not able to pay salary increases, and open up their accounts. "Good operators will always show that they value their people, but now they must do it more than ever before by investing more time in training, holding regular staff meetings and showing them that they care."
By Janet Harmer
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