Hospitality sector struggling under staff shortages, high prices despite higher turnover

Catering entrepreneurs are again making a higher turnover than before the coronavirus crisis, according to the industry association KHN. But the sector continues to face significant challenges, such as higher purchasing costs and a lack of personnel. Customers can expect higher prices and encounter closed restaurants, closed terraces, and fewer choices on the menu this year.

According to the KHN, the hospitality sector achieved a turnover of almost 26 billion euros last year, slightly higher than in 2019. But entrepreneurs saw their profits evaporate due to the much higher costs. “The margins are under considerable pressure. A margin of about 14 percent remains necessary to invest and to give yourself a fair remuneration as an entrepreneur, but employers are not achieving that now. The price is often not fair,” KHN chairman Rober Willemsen said to ANP.

Restaurants will have to further increase the prices of food and drinks, Willemsen said. Entrepreneurs hardly dare to pass on their higher purchasing costs to the customers, but they can’t keep it up. He doesn’t expect the price increases to scare consumers away.

Prices for food and other necessities have risen sharply in the past year, but according to Willemsen, people still come to the catering sector for a beer and a steak. “Last year, we saw what we were missing during the coronavirus. That is the picture that prevailed, despite the increased costs and lower margins.”

According to Willemsen, maintaining or increasing the workforce is “one of the most important focus points for 2023,” he said to ANP. “The tension in the labor market is expected to ease slightly in 2023, but the shortages will remain,” he expects.

The sector sees many young people opting for a side job in the hospitality industry again. “But the number of people who obtain a vocational diploma in the hospitality industry has been declining for years. Many young people also still see the hospitality industry as a temporary employer and leave after one or two years.”

The “binding, captivating, and educating” of employees is the greatest challenge for entrepreneurs in the hospitality industry. Staff want to have prospects. The sector should also continue to focus on making catering courses more attractive, Willemsen said.

According to the KHN, cafes and restaurants are increasingly offering ready-made meals to customers due to the lack of staff. Willemsen sees previously prepared dishes as a good solution that does not automatically come at the expense of customer satisfaction. “The quality of ready meals has increased in recent years. You can see that entrepreneurs are now investing in better ovens to heat the meals and paying more attention to the preparation to deal with the staff shortages,” Willemsen said to ANP.

The need for chefs, in particular, is great. “Of the approximately 60,000 structural vacancies, 40,000 are in the kitchen,” said Willemsen. On a scale of 1 to 10, the chef shortage is at an 8. Among serving staff, the shortage is an average of 4, which is already very high.