Current DEHOGA survey: Energy cost explosion in the hospitality industry

DEHOGA President Zöllick on the relief package: "The extension of the 7% VAT on food in restaurants is the right and much-needed signal for the industry in challenging times."

VAT cut for food in the hospitality industry from July 1 limited until December 31, 2022
© Deutscher Hotel- und Gaststättenverband e.V. (DEHOGA Bundesverband)
Source:  Company news

"Hoteliers and restaurateurs in Germany are suffering from the explosion in costs for energy, food and staff," explains Guido Zöllick, President of the German Hotel and Restaurant Association (DEHOGA Bundesverband). This is the result of a recent DEHOGA survey. The extension of the 7% VAT for meals in restaurants announced on Sunday in the relief package is all the more important, he said. "Retaining the reduced VAT rate is the right and much-needed signal for the industry in challenging times, giving courage and hope," says Zöllick. He added that the latest DEHOGA survey showed that energy costs had already risen to 10 percent or more of turnover for almost half of establishments (48.8%), with energy costs accounting for between 15 and 20 percent of turnover for 10.7 percent and more than 20 percent of turnover for 8.7 percent. "It remains to be hoped that the German government will succeed in limiting the massive burdens for entrepreneurs and employees with the planned measures," Zöllick continued. "Now it's a matter of concretizing and implementing the agreed relief package, and that applies in particular to business aid."

According to the DEHOGA survey, rising energy prices are at the top of the problem ranking for 89.0 percent of businesses. 56.3 percent of entrepreneurs report announced price increases for electricity, averaging 103.8 percent. At 60.8 percent of establishments, gas prices will increase by an average of 152.4 percent. "Cost pressures in the hospitality industry continue to increase," Zöllick says. He adds that it should be noted that around 40 percent of establishments have not yet received any information from their energy provider.

To make matters worse, sales continue to be below pre-crisis levels. For August, the industry reported a nominal 2.6 percent drop in sales compared to August 2019, and from January to August 2022, businesses turned over 9.7 percent less compared to the pre-crisis period. "The concerns and existential hardships in the industry are growing," Zöllick said, referring to the survey results. According to this, 37.7 percent of the entrepreneurs assess the cost development in the energy sector as "threatening their existence". In addition to energy cost increases, rising food prices (73.5%), declining sales (67.0%) and personnel costs (62.5%) are among the biggest challenges facing businesses.

"The hospitality industry is facing a difficult winter," says Zöllick. This makes setting the right political course all the more important. "Ensuring energy security and concrete measures to curb the price explosion for gas and electricity must now have top priority."

From August 31 to September 4, 3,000 hospitality businesses from across Germany took part in the DEHOGA Bundesverband's survey on the current situation in the hospitality industry.

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