The crisis is closing restaurants and cafés in Germany – hard times for German hospitality businesses continue.

Since the first pandemic year of 2020, around 48,000 companies have closed, and 6,100 have gone bankrupt, a study by the agency Kreditreform showed.

Experts expect the negative trend to continue.

“The wave has only just begun,” said Patrick-Ludwig Hantzsch, head of research at the agency, dpa reports.

In the past year alone, every tenth entrepreneur in gastronomy gave up the business. 14,000 establishments were closed, which is more than in the previous three years.

The same is true for bankruptcies, which in 2023, according to Kreditreform data, were 27 percent higher than in the economy as a whole.

Most small businesses, with up to 10 employees, were insolvent – 88 percent of them.

Hanch says that one of the reasons is government aid during the lockdown. Subsidies ensured the survival of many companies and initially prevented business closures.

“Hospitality is one of the main losers in the series of crises in recent years,” said Hanch, explaining that the industry has still not recovered from the pandemic crisis, and then the blow of inflation arrived.

In addition, the Government temporarily reduced VAT for hospitality businesses in mid-2020, from 19 to seven percent. However, since January the regular rates have been in force again.

Source: poslovni.hr