More than half of hospitality and leisure sector leaders are concerned about the state of the economy with talent said to be the biggest long-term challenge, according to report from international executive search firm Heidrick and Struggles.

The report ,published in partnership with the British Hospitality Association, also showed that 10% of industry leaders think that business confidence is much worse now compared to previous years.

Meanwhile, businesses in the sector are anticipating a recruitment gap of over a million jobs by 2029, according to a report by the British Hospitality Association and professional services company KPMG. This would mean the industry would need to recruit 60,000 UK workers in addition to sustained recruitment of 200,000 more per annum to meet the demands of growth. The report states that filling these openings would likely be impossible without hiring migrant workers.

Firms are reliant on European workers, with half of CEOs reporting their workforce as 25-50% European, with more than a third of those businesses hiring EU citizens to fill 50-75% of their workforce.

"We have seen real concern from the most senior people across the hospitality industry, not only about talent and other Brexit-related concerns, but due to a number of headwinds facing the industry. With the cost of imports continuing to rise, increasing prices for customers and an expectation of decreasing consumer confidence in 2018 and 2019, there are a number of challengers facing businesses across the sector,” Ben Twynam, Partner at Heidrick and Struggles, said. “While industry leaders are relatively confident about the remainder of 2017, they are far more pessimistic about the two years thereafter, when the real impact of Brexit will come to fruition."

"It is no exaggeration to say that hospitality and tourism face a perfect storm which is well articulated by our industry's top executives in this report a looming recruitment crisis caused by cuts to come in EU immigration, rising costs on both materials and labour, increased business rates and a tax regime that favours our European competitors,” Ufi Ibrahim, the chief executive of the British Hospitality Association, said. “We have been urgently discussing these matters with the last government and will do so with the next. Our 10-year strategy to encourage more UK workers into the industry has been well received and we have confidence that with government support we can continue to grow what is the fourth largest industry in the UK."

The British Hospitality Association states that hospitality and leisure industry is the fourth-largest employer in the UK, with 4.5 million people working in more than 180,000 businesses across the country.