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  • Writer's pictureStephan Busch

How much is enough? Hospitality can’t take it anymore

Updated: Apr 5, 2020

Restaurants, small hotels had always a hard time to survive. Margins are small.

Taxes are high. Staff hard to pay and - thus hard to find. Like David Chang put it in a recent interview with the New York Times:

“It’s the most exposed business. There’s a lot of successful chefs I know who have five to nine days left of money. And then what do you do? I don’t know.”

David Chang, New York Times 30. March 2020

The years before the Corona crisis started were already a hard time. The amount of restaurants catering to the very rich is very small, the masses – middle to low income - could less and less effort to spend money in restaurants or in resorts. The Junk food Chains like MacDonald’s and Coffee shops like Starbucks out played them easily by avoiding taxes.

Service paid for?

The Pharma industry makes a fortune like in any health crisis. While the essential services that nurses, care takers and medical staff provide is now highly appreciated I haven’t heard about a raise for them. As a friend of mine told me: “They are thinking about it”. Great! “They” - I assume is the government that never had to think twice to save Deutsche Bank.

When is enough enough?

After this crisis the cap will have widened tremendously. The rich will be tremendously richer, the middle class will be dead and the poor will be poorer but much higher in numbers. Visiting a restaurant will be financially unaffordable but also physically impossible as there wont be many around.

To quote David Chang again who had to close all his restaurants:

“More than anything I do not want to incite panic and hysteria, but I think for restaurants and the service industry, there is going to be a morbidly high business death rate. My fear is the restaurants that survive are going to be the big chains, and we’re going to eradicate the very eclectic mix we had before.

David Chang, New York Times 30. March 2020

When is enough - enough?

Author: Stephan Busch, Academic Director at the State University for the Humanities Moscow 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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