An estimated 650,000 job losses have ravaged the hospitality industry in the past year, according to figures.
Analysis of more than 700 restaurants, pubs, and bars by the hospitality software provider Fourth found the total number of jobs in the sector has fallen by a quarter compared to January 2020.
It is believed thousands more workers will lose their jobs if the reduction in VAT is not extended past March.
A separate study has warned that a further 310,000 industry jobs could be lost if the cut to VAT is not extended.
The second report is based on a survey of 1,144 hospitality and tourism businesses carried out by the Cut Tourism VAT (CTV) campaign, UKHospitality, the Tourism Alliance, and the Association of Leading Visitor Attractions.
The Chancellor Rishi Sunak slashed VAT on food, accommodation and attractions from 20 to 5 per cent last July as he looked to offset the economic damage wrought by Covid-19.
The reduction is also due to end in March.
Kate Nicholls, chief executive of UKHospitality, said: “If the government wants to see a turbo-charged recovery in communities right across the UK then an extension go the VAT cut is the surest way to do it – creating jobs, investment in our high streets and helping customers get a cheaper hospitality experience.”
Kurt Janson, director of the Tourism Alliance, said: “The temporary reduction in VAT for the tourism and hospitality industry has been vital in protecting businesses, suppliers and employment, so returning to a 20% rate would undo all that good work.
“We believe that there is also a huge benefit in combining a reduction in VAT for the tourism and hospitality industry with a reduction in the VAT threshold for businesses.”