Rishi Sunak has promised to create up to 20,000 more apprenticeships with a series of reforms including cutting red tape for small businesses.
The Government has also pledged to cover the full cost of apprenticeships for people aged 21 or under at small firms from 1 April.
It has promised £60m of new investment for next year to make this happen.
Kate Nicholls, chief executive of UKHospitality, said: “The people who work in hospitality are the beating heart of our sector and are the reason we can provide quality food, drink, experiences and service.
“Investing in people is so important and it’s one of the reasons we see so many people progress through the sector, going from bar to board in a matter of years.
“The changes to apprenticeships announced by the Prime Minister today are very positive. Removing the fee for non-levy payers and expanding the definition of SMEs will all benefit smaller businesses.
Increasing the levy transfer amount to 50% will free up more funds to be used for training, rather than being left unused.
“Overall, there is much to be pleased about, and these changes will benefit both businesses and employees.”
However, she added, the reality is that the entire apprenticeship system is structurally broken.
She said the levy itself needs reform to allow businesses more flexibility with funding and urged the Government to make that a central pillar of its skills agenda.
Reacting to the announcement, British Beer and Pub Association chief executive Emma McClarkin said: "Today's announcement of an additional £60 million for apprenticeships is a welcome step forward, and we hope that it marks the beginning of a broader journey of reform for the apprenticeship levy, enhancing its flexibility.
“It's imperative that we empower businesses, like our pubs and brewers, to fully utilise levy funds for growing and developing their workforce.
“This need is especially acute in the beer and pub sector, where a flexible, effective apprenticeship and skills levy can become a significant part of combatting the significant issues in recruitment we continue to face."
