Gastronomy Woes in the Countryside: Few Concessions on Price
Rural guesthouse prices remaining high, minimal drops observed in smaller towns - Rural restaurant count is dwindling amidst minimal price decrease
Betting on recovery, Thuringia's hospitality sector's resurgence has been more urban-oriented, yet rural eateries struggle with fewer establishments than pre-pandemic days. "Shop windows darken as restaurateurs grapple with staff shortages, slashing hours, and shutting down businesses in the countryside," says Dirk Ellinger, CEO of the Thuringian Hotel and Restaurant Association (Dehoga).
Struggling to keep up, rural restaurateurs are cutting back their hours, taking extended rest days, and even leaving the industry. Some establishments close due to a lack of takers for takeovers.
A broad wave of price cuts on menus isn't on the horizon
The hospitality industry anticipates the federal government's proposed VAT reduction from 19 to 7 percent for food. Ellinger confidently predicts this project won't face further political delays. It would help the industry offset escalating costs, particularly for food and energy.
Although increased costs have been passed on to some customers, many restaurateurs are hesitant, fearing customer attrition. So, widespread price cuts for restaurant visits are an unlikely outcome with a VAT reduction, says Ellinger. "In the end, each entrepreneur makes the call."
Industry relies heavily on part-time work
Thomas Günther, board member of the Alliance of the Event Industry in Thuringia, offers support to Ellinger's views. Günther advises entrepreneurs to utilize the planned VAT reduction to compensate for costs.
According to Dehoga, Thuringia's hospitality sector now boasts a slight increase in full-time employees compared to 2019, standing at nearly 20,600. Alongside these full-time workers, there are around 45,500 part-time or casual workers pivotal to the industry's function.
For 2025, Dehoga predicts a steady revenue growth for the sector, aiming for a slight revenue increase without the exponential cost increments seen earlier, targeting a recovery from the Corona slump.
Lengthy trips a rare sight
Over the past year, Thuringia's hoteliers and restaurateurs enjoyed a record-breaking number of overnight stays exceeding the ten million mark. However, the average guest stay of 2.6 days remains a persistent shortcoming. The Rhön region boasts the highest average stay (4.3 days), followed by the Thuringian Forest (3.2 days), while Erfurt and the Saale region in eastern Thuringia stand at 1.8 days and 2.4 days, respectively.
First-quarter occupancy rates of guest rooms averaged 44.5 percent in Thuringia in 2025. The state must catch up, yet winter sports areas' empty slopes at the start of the year present a challenge, explains Ellinger. Germany's overall average occupancy rate between January and March was 50.1 percent.
The hospitality industry urges the government to streamline regulations concerning the Working Hours Act and reduce bureaucracy. Ellinger advocates for a packaging tax ban imposed by the state government, based on a Tübingen study's findings, which indicated that packaging taxes would not lead to detectable waste reductions.
- In the rural areas of Thuringia, the hospitality industry is advocating for the federal government's proposed reduction in VAT from 19 to 7 percent for food, as it would help offset rising costs, particularly in food and energy, and is optimistic that this project won't face further delays, strengthening the employment policy within the sector.
- The Thuringian hospitality sector, despite an increase in full-time employees compared to 2019, relies heavily on part-time or casual workers, totaling around 45,500, crucial for the industry's function, reflecting a significant aspect of the community policy in the region.
