From April 2016 all businesses will have to pay staff over the age of 25 a minimum of £7.20 per hour, a 50p rise on the current minimum rate.
In a survey of 93 Best Western hotel owners 90 per cent said they would have to raise prices to combat higher staff salaries, 43 per cent said they would have to reduce their workforce and 80 per cent were planning to rethink recruitment strategies.
Rob Payne, CEO of Beacon and Best Western Great Britain said: “While we are in favour of a fair wage for everyone, our members are telling us that they are worried.
"The bigger picture here is that this will impact every café, every bed and breakfast, every visitor attraction and every pub, with potentially damaging consequences for investment in the British hospitality industry.”
The Office for Budget Responsibility (OBR) estimates that the Living Wage will lead to cuts in working hours of 0.4 per cent – resulting in 60,000 lost jobs.
But Payne warned that job losses would be ‘disproportionately distributed’ among smaller hospitality businesses unable to absorb the extra costs.
“I would urge the Government to do all it can at this time to help ease the pressure of the Living Wage in the hospitality industry elsewhere by looking again at reducing Tourism VAT, make the issue of rate parity a priority bringing us in line with our European businesses, and reducing the regulation burden,” he said.
“Without this support I am concerned that the hospitality industry could pay a higher price for the introduction of the new National Living Wage.”
The 275-strong Best Western group is the largest collection of independently owned and family run hotels in Britain.