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  • Writer's pictureStephan Busch

Hospitality - diversity and profit? Will that ever be possible again?

Hospitality always flourishes in times of prosperity and secure living conditions. Profit is hard to come by even in good times, but it's even harder today with geopolitical upheavals casting their shadows, costs skyrocketing and many jobs at risk.

“The managing director and owner of the Paniceus group of companies (Patrick Junge) currently sees no reason to celebrate. With the planned increase in value added tax for food from 7 to 19 percent (in Germany), which is to take effect at the turn of the year, he sees a catastrophe rushing towards the catering industry

At least here the state could have stepped in to help, as this would have at least relieved the local gastronomy, which employs many people and contributes to relaxation and cultural diversity.

“Because of the Corona crisis, around 40,000 companies nationwide had to close. Since then, the catering industry has achieved an extraordinary turn around: to-go offers, hygiene concepts, employees were won back after the lockdowns. But now inflation and energy prices are hitting the catering industry harder than other sectors.” 05/08/2023

It's not much different in the UK where cost are rising resulting in tens of thousands of bankruptcies in the hospitality sector. In countries like Italy, France, Portugal, this is somewhat alleviated by low additional costs, higher pensions than in Germany and the fact that, unlike in Germany, most people own their own home and therefore only the additional costs are a growing burden, but not the combination of both.

"If the next wave of inflation comes now due to the higher VAT, the restaurants are inevitable to die," fears Patrick Junge. Corona has triggered a huge wave of bankruptcies. With the planned VAT increase, the industry is hit hard again. That's not scaremongering, it's mathematics." 05/08/2023

Variety and quality has suffered and a tourist who comes to Germany today often encounters more kebab stands than bratwurst stands, more sisha bars than local coffee houses and more fast food chains than middle-class original local cuisine. If we continue like this, the tourist can stay at home.

Author: Stephan Busch, for many years Academic Director at the State University for the Humanities RGGU, Faculty of Tourism & Hospitality and the Swiss International University earned his Master Certificate in Hospitality Management from Cornell University, USA. He has a diverse experience in launching operations, business development and service training- for hotel and cruise companies in Asia, Europe, Canada and Russia.,

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