According to the Office for National Statistics (ONS), 101,000 net migrants arrived from the EU in 2017 - the lowest figure for nearly four years.
There was also a record number of EU citizens emigrating from the UK last year, with an estimated 139,000 leaving the country.
UKHospitality, which represents over 700 restaurants, pubs and hotels, described the figures as “alarming”.
“Although net migration from the EU still stands at 100,000, this represents a significant fall on the previous year,” says Kate Nicholls, UKHospitality chief executive.
“Particularly distressful is news that this squeeze is being felt most acutely in lower-skilled labour which makes up the bulk of the workforce.
“The hospitality labour pool is shrinking and around a quarter of employers in the sector already say they are struggling to fill vacancies. The hospitality sector relies heavily on EU migrants to fill many of its vacancies and should this trend continue, businesses are likely to struggle to keep up with projected growth.”
Last year a KPMG study estimated that 75% of UK waiting staff, 25% of chefs and 37% of housekeeping staff are from the EU.
The ONS also said there was a rise in those arriving from outside the EU, with overall net migration at its highest since 2011.