Figures on the catering crisis: sales in the hospitality industry are falling

Inflation and Corona crisis
Weak summer puts pressure on innkeepers

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The mood in the catering industry is bad. Landlords, hotel operators, snack bars and café owners can look back on a weak July. Official data confirms: Germany’s restaurateurs are recording significantly lower sales.

Sales in the German hospitality industry were once again weaker in the summer of 2023 than in the previous year. In July, the numbers fell in real terms, i.e. adjusted for prices, by 4.1 percent compared to the same month last year, as the Federal Statistical Office announced based on an initial evaluation. As of June 2023, sales fell by 1.5 percent after calendar and season adjustment.

The increased prices for food, drinks and rooms only drove up sales in nominal terms: on paper, they were up 2.7 percent compared to the same month last year. “The difference between the nominal and real results reflects the significantly increased price level in the hospitality industry,” explained the statisticians.

The German catering industry has been struggling for years with declining guest numbers while at the same time rising costs for energy, personnel and purchasing. Many companies find themselves in a quandary: if they increase the prices for hotel rooms, accommodation, food and drinks, this is likely to further dampen guests’ willingness to spend. The economic prospects threaten to deteriorate further.

Sales have not yet fully recovered from the cuts caused by the Corona crisis. Compared to July 2019, the comparable month before the outbreak of the corona pandemic, real sales in the hospitality industry actually fell by 9.8 percent. At the same time, it is becoming increasingly difficult to find trained staff.

Things went particularly badly for hotels and other accommodation companies last summer. In total, they had 4.5 percent less sales than in the previous month, according to the Federal Statistical Office. On the other hand, sales in the catering industry, i.e. restaurants, cafés, canteens and snack bars, rose slightly in the summer of 2023, albeit only by 0.2 percent.

“No more reserves”

The German Hotel and Restaurant Association (Dehoga) is calling for the VAT for food in restaurants, which was reduced during the Corona and energy crisis, to be kept permanently low. After several extensions, the tax rate is set to rise again in January 2024 from the current 7 to the original 19 percent.

Zöllick warned that the businesses would have to pass this and other costs on in full to the guests, “since the restaurateurs no longer have any leeway or reserves.” According to the Dehoga survey, a good 90 percent of catering entrepreneurs would then increase their prices. In his opinion, such a step would lead to “a price shock for guests”.

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