Struggles in the Rural Gastronomy Sector: A Persistent Slump
Rural Hotels Shutting Down - Minimal Discounts on Closed Establishments - Rural dining establishments are witnessing a decrease - prices seldom drop
In Thuringia's hospitality scene, a steady economic recovery post-pandemic can be noticed, particularly within the urban landscape. However, the rustic countryside isn't faring as well, cancelling out almost 200 businesses from their pre-pandemic numbers as per Dirk Ellinger, CEO of the Thuringian Hotel and Restaurant Association (Dehoga), residing in Erfurt.
This gradual decay in the countryside calls for urgent attention, primarily due to labor shortages, particularly in remote regions. In response, restaurateurs have made adjustments such as adjusting hours, granting extra days off, and even shuttering businesses. Closures also loom due to a lack of interested buyers for takeovers.
No broad price cuts on the horizon
The gastronomy sector yearns for the government's planned VAT reduction from 19 to 7% for food, aiming to alleviate escalating costs, notably for sustenance and energy. According to Ellinger, this policy should avoid unnecessary political delays to offer relief to the industry. Regardless, surveys suggest that only a fraction of restaurateurs have fully passed on higher costs to customers. Many business proprietors fear losing clientele if they impose such price adjustments. Consequently, a wave of price decreases for dining out experiences appears unlikely, says Ellinger. "In the end, each entrepreneur bears this decision."
The events sector echoes this sentiment. Thomas Günther, board member of the Alliance of the Event Industry in Thuringia, encourages restaurateurs to use at least part of the planned VAT reduction to counterbalance costs.
Thuringia's hospitality industry's full-time workforce is now slightly higher than in 2019, with nearly 20,600 employees. Moreover, the industry relies on around 45,500 part-time and lower-wage employees, playing an essential role in keeping businesses operational.
Looking ahead to 2025, Dehoga projects a steady revival for the industry, anticipating a slight increase in revenue without the enormous cost increases that have plagued the past few years. Their goal is to recover from the Corona slump.
Visitors in Thuringia maintain an average sojourn of 2.6 days, a challenge that continues to grate on the industry. The Rhön region boasts the highest average stay of 4.3 days, followed closely by the Thuringian Forest, known for its family-friendly and hiking attractions, with an average of 3.2 days. On the other hand, Erfurt offers an average of 1.8 overnight stays per guest, while the Saale region in eastern Thuringia boasts 2.4.
In the first quarter of 2025, Thuringia's guest room occupancy rate lagged behind at an average of 44.5%, still playing catch-up. "But it's difficult to thrive when winter sports regions experience little snow at the start of the year," said Ellinger. Nationally, the average guest room occupancy rate between January and March stood at 50.1%.
Leveraging flexibility from the Working Hours Act and less bureaucracy are goals the hospitality industry and events sector pins hopes on. Ellinger requested, in light of Erfurt's debate on introducing a packaging tax, for the state government to halt thistax. According to him, a study from Tübingen reveals that a packaging tax does not bring about a significant decrease in waste.
- Amid the struggles in the rural gastronomy sector, calls for the government to expedite the implementation of the employment policy aimed at reducing VAT for food could be crucial, as highlighted by Dirk Ellinger, to help alleviate rising costs and provide much-needed relief to businesses.
- In addition to the gastronomy sector, the finance sector's role in shaping Thuringia's economic landscape becomes increasingly important, particularly in providing favorable conditions for employment policies that promote growth and development, such as those that offer tax breaks or incentives for businesses to expand in rural areas. This could help address labor shortages and support the lifestyle and food-and-drink industries in the countryside.
