BERLIN, Aug. 17 (Xinhua) -- Real revenues in Germany's hospitality sector in the first half (H1) of 2023 were still 10.4 percent lower than in H1 2019, before the COVID-19 pandemic, according to preliminary results published by the Federal Statistical Office (Destatis) on Thursday.
"The situation remains extremely challenging," said Guido Zoellick, president of the German Hotel and Restaurant Association (DEHOGA), in response to the figures. The entire sector is heading for its fourth loss-making year in a row.
As inflation in Europe's largest economy is only slowly declining, nominal revenues were up 9.6 percent compared to pre-COVID-19 levels and 15.8 percent compared to the previous year, according to Destatis.
"The gap between the nominal and real results reflects a significant long-term increase in price levels in the hospitality sector, to which rising prices for food, staff and energy are likely to have contributed," Destatis said.
In July, Germany's inflation rate weakened slightly to 6.2 percent, according to official figures. While energy was the main price driver in 2022, it is now food that is keeping overall prices high. Food products were 11 percent more expensive than a year earlier.
Consumers have long started to react to the difficult economic situation. According to the German Retail Association (HDE), consumer sentiment in August remained at a low level. "Consumption will not be a major support for the economy in the foreseeable future," HDE said recently.
Already, COVID-19 pandemic and the following energy crisis have left their mark on Germany's hospitality industry. According to DEHOGA data, 36,000 businesses closed over 2020 and 2021.
During the peak of the pandemic, 63 percent of employees in Germany's hospitality industry received short-time work benefits while industry sales taxes were reduced from 19 percent to 7 percent. The tax cut runs out at the end of 2023.
"It would be contradictory and distort competition to tax freshly prepared food in our restaurants at 19 percent again from January 1, 2024, while charging 7 percent on takeaway, supermarket, or food delivery meals," Zoellick said.
"To secure the future of restaurants and pubs, it is essential that food, no matter where and how it is prepared and consumed, is permanently subject to 7 percent VAT," Zoellick stressed. ■
