Hospitality industry warns ‘ridiculous' hike in visa fees will worsen staffing crisis

25 September 2023 by
Hospitality industry warns ‘ridiculous' hike in visa fees will worsen staffing crisis

Chefs, restaurateurs, and hoteliers have warned an upcoming 15% hike in visa fees could damage the UK's culinary reputation by making it more difficult to recruit from abroad.

From 4 October, the price of an overseas skilled worker visa issued for three years or less will rise from £625 to £719, while a shortage occupation skilled worker visa will cost up to £1,084, compared to the current fee of £943.

Nicolas Budzynski, chief executive officer at LPM Restaurant & Bar in London's Mayfair, said the price increase could make it more difficult to create the diverse workforce needed to help London to retain its reputation as a "modern culinary capital of the world with Paris, New York, Tokyo and Hong Kong".

"I am afraid this positioning may simply slowly vanish… that is such a shame our industry is not better understood, and no better solutions are provided to us," he added.

The announcement comes as the hospitality industry continues to face acute staff shortages, with the Office for National Statistics recording 124,000 job vacancies in the sector between May and July this year.

Sir Rocco Forte, chairman of Rocco Forte Hotels, described the upcoming rise in visa fees as "counterproductive".

"We should be doing what we can to encourage those people who are useful to our economy and want to work," he said.

Simon Wood, chef-owner of Wood Manchester, told The Caterer that he needed to hire from overseas due to the difficulty of recruiting in the UK. He said 80% of applicants for jobs at his restaurant failed to show up to interviews and typically demanded wages roughly 20% higher than pre-pandemic rates.

"I wouldn't say staffing has improved. At the minute it's very challenging, not just because of Brexit. It's just very difficult to find good staff since Covid. A lot of people left the industry," he said.

Wood said he had been in the process of hiring a chef from Peru but was forced to give up as the process was so "drawn-out" it was "almost impossible to make it happen".

"I think [a 15% rise in the cost of visas] is ridiculous, really. We're doing all the work. We fill everything out; all they've got to do is look at it. It's quite shocking."

The chef currently employs 23 staff, none of whom are on an overseas work visa. Wood used to work with a "very skilled" pastry chef on a six-month visa who had "integrated himself fantastically to the team" but ultimately had to return to Peru due to complications in maintaining his permit.

"Margins are so tight. It all comes out of the bottom line at the end, and when you're just struggling to break even and a lot of restaurants are at the minute, it's very difficult," Wood added.

Markus Thesleff, founder of London hospitality firm Thesleff Group, which operates Los Mochis, Viajante87 and Sale E Pepe, said: "Given the fact that there's a shortage of skilled chefs, especially in the industry, [the extra visa cost] is just going to add more fuel to the fire.

"It's very short-sighted because in real terms, it is not actually going to have any effect on curbing migration. The companies have no choice; they have to pay it, and if they have to pay, they have to pass on the costs."

Visa scheme still essential

Charlotte Kemp, managing director of hospitality recruitment, training and consultancy firm Sixty Eight People, told The Caterer the 15% visa price hike needed to be put in a broader context.

"The net increase, if you are applying for an under three-year visa, is about £94," she said.

"The costs of not having the right number of people in your business would far outweigh the costs of international recruitment.

"We've worked with clients previously who were spending between £6,000 and £8,000 a week on temporary agency staff, which not only comes at a big financial cost, but also the level of commitment that you get from a never-ending stream of different people in the business."

Kemp said the upfront costs of investing in a long-term overseas worker visa could save businesses struggling with a high turnover of UK staff more money in the long-term.

However, Kate Nicholls, chief executive of UKHospitality, said the government needed to make the process easier for operators to use.

"The legal migration route was already too expensive and burdensome for hospitality businesses, and we would urge the government to consider how to make the entire system more business-friendly, instead of simply making it more financially challenging," Nicholls said.

"At a time of high vacancies within hospitality, making it easier for businesses to recruit hard-to-fill roles, alongside helping the economically inactive into work, will help the sector reach its full potential, which in turn drives economic growth."

The Home Office has been approached for comment.

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