Gastronomy in distress: there is a risk of bankruptcies despite quality and service!

Gastronomy in distress: there is a risk of bankruptcies despite quality and service!

In the current situation, the hospitality industry in northern Germany, as in other parts of Germany, is struggling with a serious crisis. Rising fixed costs and a tense personnel situation are putting a strain on hotels and restaurants. The economic conditions are challenging for many companies, which is also leading to an increase in bankruptcies in Mecklenburg-Western Pomerania. According to the Baltic Sea newspaper Rising prices for food and drinks are a central point of discussion. Due to the high cost of living, which also affects the catering industry, many guests have to save money and consider whether they would rather switch to cheaper alternatives when visiting a restaurant.

The numbers speak for themselves: In the first half of 2025, real sales in the German hospitality industry fell by 15.1 percent compared to 2019. According to DEHOGA, the German Hotel and Restaurant Association, this was the sixth consecutive year of losses for the industry. The catering industry is particularly affected, recording a decline in sales of 17.4 percent compared to 2019 and 4.1 percent compared to the previous year. One of the main reasons cited is the increase in VAT on food from 7 to 19 percent, which came into force on January 1, 2024. DEHOGA President Guido Zöllick is therefore calling for a return to the previous tax regulation in order to relieve the burden on the industry and ensure its competitiveness.

Price increases and their consequences

Rising operating costs represent a key challenge for the catering industry. Here are some of the most recent price developments:

• Personalkosten: +34,4% seit 2022
• Lebensmittelpreise: +27,1%
• Energiepreise: +27,6%
• alkoholfreie Getränke: +33,7%
• alkoholische Getränke: +17,9%

These price increases lead to increased price sensitivity among guests. They eat out less often and choose cheaper options more often. The trend is even that consumers are increasingly turning to take-away food or products from grocery stores instead of considering going to a restaurant.

The social role of gastronomy

Gastronomy plays an important social role: it is a social hub where people meet and also secures numerous jobs, especially for low-skilled workers. Given the current challenges, there are concerns that restaurant closures could impact the attractiveness of neighborhoods and weaken local infrastructure. These developments could also endanger the diversity and quality of the gastronomic offerings.

Political decision-makers are under pressure to take appropriate measures to adjust the tax burden on the industry and thus ensure competitiveness. Without appropriate measures, there is a risk of a change towards cheaper convenience offers, which could have lasting changes in the catering industry. The DEHOGA is also observing a trend towards smaller, more flexible and digitalized offerings, which is being reinforced by the crisis.

Overall, it shows that good quality and excellent service in the hospitality industry are crucial to strengthening customer loyalty and encouraging guests' willingness to pay. Only through targeted measures and political support can companies in the region overcome their challenges and successfully assert themselves on the market.