Rising operational costs impacting hiring and staff benefits, report finds

Rising operational costs are significantly impacting hiring, staff benefits, and training in the accommodation industry, a report from Expert Market has revealed.

Almost half (48%) of businesses cited staffing as a key risk, while a quarter said they will cut investment in employee benefits and training.

The Accommodation Industry Report, which surveyed over 400 accommodation businesses, found that rising labour costs were the primary operational risk for just over a third (34%) of respondents, followed by rising maintenance costs (27%) and increasing interest rates (19%).

The findings highlighted the growing financial pressures faced by the industry, which is already experiencing the highest quit rates since 2022.

The impact of these cost increases is particularly evident in hiring and staffing levels.

Nearly half (49%) of franchise businesses and over a third (34%) of independents reported cutting back on recruitment as a direct response to rising costs.

Staff welfare and benefits are also being affected, with 18% of franchises and 10% of independents reducing investment in these areas.

Staff recruitment, retention, and training were identified as the biggest challenge for both franchise and independent accommodation businesses, with 51% of franchise professionals and 29% of independent operators stating this as their primary concern.