The German hospitality and gastronomy sector is grappling with serious financial difficulties. Despite nominal revenue growth, accounting for inflation reveals a real regression in the industry. The situation was not even improved by the VAT reduction on meals, as rising operational costs, particularly personnel expenses and the increase in the minimum wage, are forcing restaurateurs to further raise prices. Data from the Federal Statistical Office confirms the widening gap between revenues and business profitability.

Real Revenue Decline

Despite a nominal increase of 1.4%, real turnover in 2025 fell by 2.1% due to high prices.

Personnel Cost Pressure

The increase in the minimum wage impacts profitability, as the sector employs many low-paid workers.

Further Price Increases

Approximately 22-25% of establishment owners plan to raise prices in the near future, despite the reduction in VAT rates.

The German hospitality industry concluded 2025 with results that concern economic experts. According to preliminary data published by the Federal Statistical Office, the sector recorded a nominal revenue increase of 1.4%, but this is a deceptive result. After adjusting for the impact of inflation and price increases, the industry's real turnover shrank by 2.1% compared to the previous year. This situation affects both hotels and restaurants, with accommodation facilities performing relatively better than the purely gastronomic sector. Historically, German gastronomy played a key role in the economy of the Federal Republic of Germany, but since the COVID-19 pandemic and the subsequent energy crisis, the sector has been facing an unprecedented wave of bankruptcies and structural changes. The effect of the VAT reduction on meals is particularly controversial. Although it was theoretically supposed to provide relief to entrepreneurs and consumers, data from January shows that visits to restaurants became 3.6% more expensive year-on-year. Many establishments decided to retain the tax savings to finance rapidly rising operating costs. Gastronomy is still under enormous pressure. Declining turnover clashes with rising costs, especially in the area of personnel, influenced by the minimum wage increase, said Guido Zöllick. The president of the industry association Dehoga emphasizes that this sector employs an exceptionally large number of people earning the lowest wages, making it sensitive to legislative changes. Forecasts for the near future are not optimistic. Survey research indicates that one in four restaurateurs plans further price increases in the coming months. 22% of gastronomic establishments already declare such a necessity, arguing a lack of profitability at current rates. Consumers, feeling a decline in purchasing power, may in response limit spending on eating out, which could lead to a dangerous economic spiral for smaller enterprises.

Mentioned People

  • Guido Zöllick — President of the industry association Dehoga, representing the interests of hoteliers and restaurateurs.