Prices jump in hospitality industry as entrepreneurs face financial pressures

Energy prices, wage increases and more expensive raw materials mean customer's bills at restaurants and other businesses in the hospitality industry will be significantly higher compared to before the pandemic, according to Nu.nl. However, some businesses are still hesitant about passing prices on to consumers.

One reason is that food has become more expensive overall: meat, bread, beer and butter have all seen a jump in prices in recent years. Higher energy prices, due to Russia's attack on Ukraine, are currently plaguing the Netherlands as well. 

The job market has also changed since the coronavirus pandemic began. Employees are in a position to demand more wages due to the scarcity of workers and this month will also see a 3.4 percent wage increase in the hospitality industry.

"In the hospitality industry you make 10 percent profit if you do very well, but if the costs increase by 25 percent, you can calculate what that means," Geerlof Kanis, owner of the Grand Café Centraal in Haaksbergen, told Nu.nl.

ING's economic bureau originally predicted prices in the hospitality industry would see an increase between 2.5 and 3 percent. However, as raw materials are becoming more expensive, the price increase will probably be "considerably higher" than this, said sector economist Katinka Jongkind.

All the higher costs do not necessarily have to be passed on to the consumer, though. "The catering industry can also choose to partly bear this themselves, but that will be at the expense of the profit margin," Jongkind said. 

Cashflow problems caused by the coronavirus pandemic are also a concern. Many entrepreneurs believe this should be remedied by the government, and become the expense of consumers, said trade association Koninklijke Horeca Nederland (KHN).