"Scrapping" fresh charge strategies could potentially push the hospitality sector over the brink
In a recent report, average earnings across Jersey showed a 4.5% increase compared to the same month last year. However, with inflation standing at 2.6%, real-terms growth was only 1.9%.
The private sector, particularly education, health, and other services, saw an 8.0% rise. Wholesale and retail earnings increased by 5.4%, while hotels, restaurants, and bars recorded a 5.1% growth. Notably, this increase in the hospitality sector was driven by the minimum-wage rise.
The hospitality industry, operating on tight margins, is concerned about the proposed further increase in the minimum wage next Spring and the anticipated new charges. Hospitality businesses fear that these cost increases will have a detrimental impact on product investment and lead to direct inflationary costs for the end consumer.
The JHA has called for politicians to abandon any plans for new or higher charges to avoid self-inflicted inflation, business closures, and increased unemployment. Murray Norton, CEO of the Chamber of Commerce, echoes this sentiment, urging caution on further policies that impact the cost and sustainability of doing business in Jersey.
Agriculture and fishing recorded the largest increase in earnings at 13.4%, while construction and quarrying was the only sector to see a fall, with earnings down 0.2% year-on-year. In comparison, the financial services sector recorded below-average growth of 3.1%. Weekly earnings ranged from £690 in hospitality to £1,320 in financial services.
June earnings per full-time employee in the sector averaged £690, a figure that has remained unchanged from the previous year. However, the median weekly earnings for a full-time employee were £890 in June 2025, which is £40 higher than last year.
The government is expected to propose a new charge for food licensing and a proposed introduction of charges for waste in the upcoming Budget. This has led the hospitality sector to voice their concerns, fearing that further charges could tip businesses in the sector over the edge, leading to potential closures, rising prices, and job losses.
Interestingly, the call comes after the publication of figures showing the biggest increase in real-terms wages since the financial crash, with earnings in hotels, restaurants, and bars rising faster than the island average. Despite this, the hospitality sector is still under pressure from minimum-wage increases and falling visitor numbers.
However, it's worth noting that there are no announced new taxes or fees in the future government budget specifically causing concern for the hospitality industry. Instead, plans include reducing VAT for gastronomy and abolishing the gas storage levy, which could provide some relief.
In the longer view, real-term earnings have shown little overall change since 1990. The mean weekly earnings were £1,000, unchanged from the previous year, reflecting the impact of higher earners.
As the situation evolves, it remains to be seen how the government will balance the need for revenue with the concerns of the hospitality industry. The industry's plea for caution and the abandonment of new charges in the Budget will undoubtedly be closely watched.
